The dollar fell to fresh two-week lows against the other major currencies on Tuesday, amid lower expectations for an upcoming U.S. rate hike and as downbeat Chinese trade data continued to weigh on sentiment.
The dollar weakened after Federal Reserve Governor Lael Brainard dampened expectations for a short term rate hike, saying that while global financial markets have steadied in recent weeks, slowing growth in China and weak global demand still pose risks to the economy.
The safe-haven yen was boosted after official data earlier showed that China’s exports tumbled 25.4% from a year earlier to $126.1 billion in February. Economists had expected a decline of 12.5%.
Imports fell 13.8% year-on-year, slowing from January’s 18.8% tumble
The steep fall in exports was due in part to the Chinese New Year, which fell earlier in February this year, but still highlighted concerns over slowing global demand.
Also Tuesday, data showed that Japan’s economy contracted 1.1% in the last quarter of 2015, less than the initial estimate of a 1.4% contraction.
The euro remained under pressure amid heightened expectations for more easing from the European Central Bank at the conclusion of Thursday’s policy meeting.
Bank of England Governor Mark Carney reiterated on Tuesday that the Boe would not make a recommendation on the referendum scheduled for June 23 that would decide if the U.K. remains in the European Union or not.
The National Australia Bank reported on Tuesday that its business confidence index remained unchanged at 3 in February and that January’s reading was revised from a previously estimated reading of 2.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.15% at 96.97, the lowest since February 22.