Investing.com - The U.S. dollar was mixed against its major counterparts on Tuesday, as investors were cautious after the downgrade of six European countries, while positive German and euro zone data mildly lifted market sentiment.
During European afternoon trade, the dollar was fractionally lower against the euro, with EUR/USD edging up 0.02% to hit 1.3189.
The euro found support after data showed that German economic sentiment improved significantly more-than-expected in February, turning positive for the first time since May 2011.
The ZEW Centre for Economic Research said that its index of German economic sentiment improved to 5.4 in February, compared to January’s reading of minus 21.6. Analysts had expected the index to improve to minus 11.6 in February.
Meanwhile, economic sentiment in the euro zone rose in February to minus 8.1 from minus 32.5 in January. Economists had expected euro zone economic sentiment to improve by 11.4 points to minus 21.1.
But sentiment remained under pressure after Moody’s Investors Service cut the debt ratings of six European countries, including Italy, Spain and Portugal, and said it may strip France and the U.K. of their top Aaa ratings.
The greenback was higher against the pound, with GBP/USD shedding 0.26% to hit 1.5725.
Bank of England Governor Mervyn King said the bank's Monetary Policy Committee expects inflation to fall back to "around" its 2% target by the end of 2012, although the pace and extent of the fall in inflation remain highly uncertain.
The comments came after official data showed earlier that consumer price inflation in the U.K. rose 3.6% in January, in line with expectations, after a 4.2% rise the previous month.
A separate report showed that U.K. retail prices rose less-than-expected in January, advancing 3.9% after a 4.8% increase the previous month.
The greenback was also higher against yen but turned lower against the Swiss franc, with USD/JPY climbing 0.77% to hit 78.17 and USD/CHF retreating 0.10% to hit 0.9157.
Earlier in the day, the Bank of Japan unexpectedly eased policy by adding JPY10 trillion to its asset-purchase program. The bank also set a 1% inflation target “for the time being” and stated that positive consumer-price growth would be defined as below 2% year-on-year.
Elsewhere, the greenback was lower against its Canadian and New Zealand counterparts but higher against its Australian cousin, with USD/CAD slipping 0.10% to hit 0.9987, NZD/USD easing up 0.03% to hit 0.8341 and AUD/USD falling 0.11% to hit 1.0720.
Industry data showed earlier that an index of business confidence for Australia rose to 4 in January from 3 the previous month.
In New Zealand, a report showed that house prices fell 1.4% in January after a 0.1% drop the previous month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, added 0.15% to hit 79.20.
Later in the day, the U.S. was to release official data on retail sales, as well as reports on import prices and business inventories.
During European afternoon trade, the dollar was fractionally lower against the euro, with EUR/USD edging up 0.02% to hit 1.3189.
The euro found support after data showed that German economic sentiment improved significantly more-than-expected in February, turning positive for the first time since May 2011.
The ZEW Centre for Economic Research said that its index of German economic sentiment improved to 5.4 in February, compared to January’s reading of minus 21.6. Analysts had expected the index to improve to minus 11.6 in February.
Meanwhile, economic sentiment in the euro zone rose in February to minus 8.1 from minus 32.5 in January. Economists had expected euro zone economic sentiment to improve by 11.4 points to minus 21.1.
But sentiment remained under pressure after Moody’s Investors Service cut the debt ratings of six European countries, including Italy, Spain and Portugal, and said it may strip France and the U.K. of their top Aaa ratings.
The greenback was higher against the pound, with GBP/USD shedding 0.26% to hit 1.5725.
Bank of England Governor Mervyn King said the bank's Monetary Policy Committee expects inflation to fall back to "around" its 2% target by the end of 2012, although the pace and extent of the fall in inflation remain highly uncertain.
The comments came after official data showed earlier that consumer price inflation in the U.K. rose 3.6% in January, in line with expectations, after a 4.2% rise the previous month.
A separate report showed that U.K. retail prices rose less-than-expected in January, advancing 3.9% after a 4.8% increase the previous month.
The greenback was also higher against yen but turned lower against the Swiss franc, with USD/JPY climbing 0.77% to hit 78.17 and USD/CHF retreating 0.10% to hit 0.9157.
Earlier in the day, the Bank of Japan unexpectedly eased policy by adding JPY10 trillion to its asset-purchase program. The bank also set a 1% inflation target “for the time being” and stated that positive consumer-price growth would be defined as below 2% year-on-year.
Elsewhere, the greenback was lower against its Canadian and New Zealand counterparts but higher against its Australian cousin, with USD/CAD slipping 0.10% to hit 0.9987, NZD/USD easing up 0.03% to hit 0.8341 and AUD/USD falling 0.11% to hit 1.0720.
Industry data showed earlier that an index of business confidence for Australia rose to 4 in January from 3 the previous month.
In New Zealand, a report showed that house prices fell 1.4% in January after a 0.1% drop the previous month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, added 0.15% to hit 79.20.
Later in the day, the U.S. was to release official data on retail sales, as well as reports on import prices and business inventories.