The U.S. dollar was under pressure on Monday, following the release of downbeat reports on consumer spending and inflation that urged the Atlanta Federal Reserve to lower its growth projections for the first quarter. The Atlanta Fed revised down its estimates to 0.6% from 1.4%.
Meanwhile, the U.S. Commerce Department said that personal spending rose 0.1% last month, in accordance with forecasts. January’s spending however, was lowered sharply. In another report, inflation as gauged by the PCE index dropped 0.1% in February and was higher 1% compared to a year earlier.
A separate report from the Conference Board, reported that its consumer confidence index advanced to 96.2 in March from an upwardly revised reading of 94.0 in February. Market participants anticipated the index to rise to 94.0 in March.
The economic reports signaled that the Federal Reserve may hike interest rates gradually in2016, despite the strengthening labour market.
The euro went up 0.09% against the dollar, trading at 1.1207, while GBP/USD rose 0.15% to 1.4276. The dollar was steady against the franc, with USD/CHF trading at 0.9739.
The USD/JPY fell 0.11% to 113.32. The Japanese yen lost ground after the Prime Minister Shinzo Abe commented earlier that he will carry on with a planned sales tax raise in April, unless the economy suffers a significant shock. A big number of analysts had anticipated the Japanese Prime Minister to postpone the planned tax raise, which could jeopardize Japan’s economic recovery.
Elsewhere, the Australian and New Zealand dollars edged higher against the greenback, with AUD/USD rising 0.13% at 0.7555, and with NZD/USD gaining 0.98% at 0.6791. USD/CAD dropped 0.20%, trading at 1.3160.
The U.S. dollar index, which tracks the greenback’s performance against a group of six other counterparts, fell 0.15% to 95.85, still trading near Monday’s one-and-a-half week highs of 96.42.