The greenback snapped its recent winning streak and fell sharply in New York on Tuesday due to profit-taking and as U.S. yields retreated whilst sterling rose across the board on dampened expectation that the Bank of England may cut interest rates to 0% after Governor Andrew Bailey said there were a lot of issues with negative rates.  
Versus the Japanese yen, dollar moved broadly sideways as focus was on other major currencies. The pair rebounded from 104.11 at Asian open to 104.32, then 104.33 in New York morning before falling to an intra-day low at 103.73 near New York close on usd's broad-based weakness.  
Although the single currency retreated to 1.2139 in Asia, price gained in tandem with cable to 1.2178 in Europe on usd's weakness before falling to 1.2138 in New York morning on cross-selling in euro, especially versus sterling. The pair erased its intra-day losses and rallied to 1.2209 near New York close.  
Although the British pound dipped to 1.3505 in Asian morning, price found renewed buying and rose to 1.3567 at European open and then jumped to 1.3607 after Bank of England Governor Andrew Bailey downplayed negative rate expectations. Cable then rallied to session highs of 1.3670 in late New York afternoon due partly to usd's broad-based weakness together with cross-buying of sterling especially vs euro.  
Reuters reported Bank of England Governor Andrew Bailey said on Tuesday there were "lots of issues" with cutting interest rates below zero and such a move could hurt banks.      "In simple economics and maths terms, there is nothing to stop it at all," Bailey said when asked about negative rates after an online speech to the Scottish Chambers of Commerce.      "However there are a lot of issues with it."      Bailey said negative rates - the subject of a feasibility review by the BoE - would complicate banks' efforts to earn a rate of return, potentially hurting their lending to companies, and that it was not easy to draw a direct parallel with similar action in the euro zone.  
Data to be released on Wednesday :  
Japan machine tool orders, Germany wholesale price index, Italy industrial output, EU industrial production, Canada leading index, and U.S. MBA mortgage applications, core CPI, CPI, real weekly earnings, Federal budget.  

Trendsetter does not warrant or guarantee the accuracy, timeliness or completeness to its service or information contained therein. Trendsetter does not give, whatsoever, warranties, expressed or implied, to the results to be obtained by using its services or information it provided. Users are trading on their own risk and Trendsetter shall not be responsible under any circumstances for the consequences of such activities. Trendsetter and its affiliates, in no event, be liable to users or any third parties for any consequential damages, however arising, including but not limited to damages caused by negligence whether such damages were foreseen or unforeseen.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD rises above 1.21 amid better market mood

EUR/USD has been extending its gains, recapturing 1.21 as the market mood improves. The German ZEW Economic Sentiment beat estimates with 61.8 points. Treasury Secretary nominee Janet Yellen's testimony is awaited.


GBP/USD clings to 1.36 ahead of Yellen's testimony

GBP/USD is edging above 1.36 as markets eagerly Treasury Secretary nominee Janet Yellen's testimony. The UK parliament is set to process the Brexit deal as Britain ramps up its vaccination campaign.


Gold recovers further from multi-week lows, climbs to $1845 region

Gold gained positive traction for the second consecutive session on Tuesday. A modest USD pullback was seen as a key factor that benefitted the metal. The risk-on mood, rallying US bond yields might cap gains for the commodity.

Gold news

Breaking: Ethereum explodes to new yearly high, validating upward price action

Ethereum has ascended to new yearly highs after breaking the recent peak achieved in January. The flagship altcoin is trading at $1,372 amid the push for gains eyeing $1,400. 

Read more

US Dollar Index looks side-lined near 90.70

The greenback, when tracked by the US Dollar Index (DXY), appears to have moved into a consolidative range around the 90.70 level following the closing bell in Asian markets.

US Dollar Index News

Forex Majors