On Tuesday the dollar was mostly lower against its peers, as investors awaited upcoming U.S. data due later
in the day, as well as the conclusion of the Federal Reserve's policy
meeting on Wednesday.
Markets are anticipating Wednesday’s Fed statement to see if it would drop its reference to being patient before raising rates and signal that it is ready to hike rates depending on economic data.
EUR/USD rose 0.45% to 1.0616 after the ZEW Centre for Economic Research said that its index of German economic sentiment rose by 1.8 points to 54.8 this month from February’s reading of 53.0. Analysts had expected the index to improve by 5.2 points to 58.2 in March.
The index of euro zone economic sentiment increased to a 13-month high of 62.4 in March from 52.7 in February, above forecasts for a gain to 58.2.
Other data indicated that euro zone consumer price inflation fell 0.3% last month, in line with expectations and unchanged from a preliminary estimate. Euro zone inflation declined by 0.6% in January. The rate remains firmly below the European Central Bank's target of near but just below 2%. Core CPI, which excludes food, energy, alcohol, and tobacco costs rose 0.7% in February, up from an initial estimate of 0.6%.
The USD/JPY stayed at 121.27 after the Bank of Japan maintained its stimulus program but cut its inflation outlook, referring to temporary declines in oil prices.
Japan's annual core consumer inflation fell below the BOJ's 2% target, slowing to 0.2% in January.
In the meantime, the dollar declined against the pound and the Swiss franc, with GBP/USD down 0.38% to 1.4772 and with USD/CHF sliding 0.49% to 1.0025.
The Australian dollar was higher, with AUD/USD adding 0.17% to 0.7654 after the minutes of the Reserve Bank of Australia's latest meeting showed that the bank seees an advantage in waiting for more economic data before lowering interest rates. The pair NZD/USD held steady at 0.7370 and USD/CAD was little changed at 1.2770.
