The dollar held above a recent two-and-a-half-month low on Tuesday as bets on an interest rate cut by the Federal Reserve increased, although investors were wary of selling aggressively before a Group of 20 summit this month.
Markets are only pricing in about a 20% chance of a rate cut in June, but they are pricing in about 100% chance of a cut by July. A policy meeting is due next week.
Against a basket of other currencies, the dollar was steady at 96.80, near a late March low of 96.46. It has fallen 1% so far this month.
Recent dovish comments from Fed officials and weak economic data have bolstered expectations for rate cuts. But markets are also looking to a G20 meeting in Osaka, Japan, on June 28-29.
Source : Reuters