The U.S. dollar weakened against its major counterparts on Tuesday, as U.S. treasury yields fell amid bargain hunting, as well as on expectations that the U.S. Federal Reserve would not raise rates quickly given the recent weak economic data.
The 10-year Treasury yield fell 0.76 percent to 2.547 percent, while yields on 30-year Treasuries were at 3.271 percent, a 0.54 percent decrease. The yield falls when bond prices rise.
Data from the National Association of Realtors showed that U.S. existing home sales fell unexpectedly by 1.8 percent in August, halting four months of gains.
According to a report from Chicago Federal Reserve, manufacturing activity in the U.S. weakened in August, with the national activity index based on a survey declining to -0.21 in the month from a positive reading of 0.26 in the previous month.
Last week, the Fed reiterated its pledge to keep interest rates at near-zero for a extended period after its bond-buying program ends. However, the Fed also hinted that monetary tightening will be less gradual once underway.
The greenback was higher against most major currencies in New York trading on Monday, as the U.S. Fed Reserve projected a faster pace of rate increases, when it starts tightening by next year.
The greenback fell to 4-day lows of 0.9361 against the franc and 1.2895 against the euro, compared to Monday’s closing quotes of 0.9397 and 1.2846,respectively. The next possible downside target for the greenback lies around 0.93 against the franc and 1.30 against the euro.