The dollar erased gains against a basket of other major currencies on
Tuesday, after data showed that the U.S. trade deficit widened to the
highest level since 1996 in March, while investors eyed the release of
additional U.S. economic reports later in the day.
The U.S. Bureau of Economic Analysis reported that the U.S. trade deficit widened to $51.37 billion in March from a deficit of $35.89 billion in February, whose figure was revised from a previously reported deficit of $35.4 billion while analysts had expected the U.S. trade deficit to widen to $41.2 billion in March.
The dollar had been supported earlier, as recent economic reports signaled that the U.S. recovery had turned a corner after a recent bout of weakness.
EUR/USD edged up 0.09% to 1.1151, easing off session lows of 1.1066.
The common currency was stronger after the European Commission said in its quarterly forecasts that it now expects the euro zone economy to grow to 1.5% in 2015 up from 1.3% three months ago.
The Commission also revised up its estimate for inflation this year to 0.1% from its earlier forecast for a decline of 0.1% and said it expects inflation of 1.5% in 2015 up from 1.3%.
Investors were still cautious amid reports the International Monetary Fund pushed the euro zone to cut Greece’s debt burden last month, amid fears that its debt is becoming unsustainable.
Athens is struggling to reach a deal with its creditors on a package of economic reforms for more bailout funds before it runs out of cash.
The British currency was higher, with Cable 0.30% higher to hit 1.5161.
Sterling was broadly impacted by a report released by market research firm Markit and the Chartered Institute of Purchasing & Supply which showed that their U.K. construction purchasing managers' index declined to an almost 22-month low of 54.2 last month from a reading of 57.8 in March while economists had expected the index to tick down to 57.5 in April.
