The dollar held onto modest gains against the other major currencies on Tuesday, even after data showed that the U.S. trade deficit widened in February, as investors focused on the release the minutes of the Federal Reserve’s March meeting on Wednesday.
USD/JPY was down 0.75% at a 17-month low of 110.50.
The U.S. Commerce Department said the trade deficit widened to $47.06 billion in Februray from $45.88 billion in January, whose figure was revised from a previously reported deficit of $45.7 billion. Analysts had expected the U.S. trade deficit to widen to $46.2 billion in February.
The dollar also remained under pressure after last Friday’s strong U.S. jobs report did little to alter the view that the Fed will stick to a cautious approach on rate hikes.
Meanwhile, the safe-haven yen was boosted as oil prices fell for a third straight session, hitting one-month lows.
The yen’s gains fueled speculation over how much higher the currency can climb before Japanese officials act to weaken the currency.
EUR/USD slipped 0.11% to trade at 1.1377.
Data earlier showed that service sector activity in the euro zone edged lower in March.
The services purchasing managers’ index ticked down to 53.1 for March from 53.3 in February and lower than the preliminary estimate of 54.0.
The dollar was higher against the pound, with GBP/USD down 0.50% at 1.4189 and was lower against the Swiss franc, with USD/CHF shedding 0.21% to 0.9569.
In the U.K., research group Markit said its services PMI rose to 53.7 last month from a reading of 52.7 in February that was close to a three-year low. Analysts had expected the index to increase to 53.7 in March.
Meanwhile, the Australian and New Zealand dollars were weaker, with AUD/USD down 0.84% at 0.7542 and with NZD/USD declining 0.83% to 0.6776.
In a widely expected move, the Reserve Bank of Australia left interest rates unchanged at 2.00% on Tuesday, but signaled the possibility for additional rate cuts in the future.
At the same time, data showed that Australia’s trade deficit widened to A$3.410 billion in February from an upwardly revised deficit of A$3.156 billion in January. Analysts had expected the trade deficit to narrow to A$2.600 billion in February.
USD/CAD climbed 0.83% to trade at 1.3194 after data showed that Canada’s trade deficit widened to C$1.91 billion in February from C$0.63 billion in January, whose figure was revised from a previously estimated deficit of C$0.66 billion.
Analysts had expected the trade deficit to widen to C$0.90 billion in February.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.12% at 94.71, still close to last week’s five-and-a-half month low of 94.30.