ECB may go neg deposit rate in June?
By Saumya Vaishampayan , MarketWatch
NEW YORK (MarketWatch) -- The U.S. dollar gained against the Australian currency on Tuesday while moving lower against the British pound, though overall foreign-exchange movements remained limited.
No major U.S. economic data are scheduled for release. Philadelphia Fed President Charles Plosser and New York Fed President William Dudley are expected to speak Tuesday.
The Australian dollar (AUDUSD) fell to 92.61 U.S. cents from 93.27 U.S cents late Monday. That's the lowest level since April 28 , according to FactSet.
The Reserve Bank of Australia's minutes from its latest monetary policy meeting, where it decided to leave interest rates on hold, showed it expects growth to remain "below trend" in the coming quarters.
"AUD is underperforming today, weighed down by RBA minutes which suggested interest rates may remain on hold and unlikely to rise in the near term as the Australian economy faces headwinds from a combination of slowing export growth to a slowing China , the negative impact of slower resource exports on investment in mining, and potential fiscal budget cuts," said Colin Cieszynski , a senior market analyst at CMC Markets , in a note.
The Aussie could fall to 92 U.S. cents over the next week, according to Boris Schlossberg , managing director of foreign-exchange strategy at BK Asset Management.
The pound (GBPUSD) moved up to $1.6845 from 1.6822 late Monday. The annual rate of consumer-price inflation in April rose to 1.8% from 1.6% in March.
The euro (EURUSD) fell to $1.3696 from $1.3710 late in the prior session. Der Spiegel reported the European Central Bank could implement a negative deposit rate in June. Speculation has been building about the potential for easing next month since ECB President Mario Draghi said May 8 he would be "comfortable" taking action in June, if necessary.
The dollar (USDJPY) fell to Yen101.31 from Yen101.41 . Investors continued to watch for a sustained push below the pair's 200-day moving average, currently at Yen101.26 , according to FactSet.
The ICE dollar index (DXY), a measure of the dollar's strength against six other currencies, rose to 80.054 from 80.005 late Monday. The WSJ Dollar Index , which pits the greenback against a wider basket of other currencies, rose to 72.96 from 72.87.
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