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    Greenback trading higher despite soft U.S. trade report

    The U.S. dollar remained higher against most of its rivals on Tuesday, despite downbeat February U.S. trade deficit data, in anticipation of the release of the Fed’s minutes on Wednesday.

    The U.S. Commerce Department reported that the trade deficit widened to $47.06 billion in February, as opposed to a downwardly revised reading of $45.88 billion a month before.  Analysts had forecasted the trade deficit to widen to $46.2 billion.

    The dollar was higher against the euro, with EUR/USD sliding 0.11% to 1.1377. Official data reported earlier that the service sector activity in the euro block decline in March. The services purchasing managers’ index fell to 53.1 from 53.3 last month, lower than the initial projection of 54.0. 

    The greenback also ticked up against the sterling, with GBP/USD falling 0.50% at 1.4189, but lower against the franc, with USD/CHF dropping 0.21% to 0.9569. Markit research group reported that its services PMI for the U.K. advanced to 53.7 in March from 52.7 a month before, a reading that was near a three-year low. Analysts anticipated the index to rise to 53.7. 

    In the meantime, the Japanese yen found support as oil prices declined for a third consecutive session, registering one-month lows. USD/JPY lost 0.75% to trade at a 17-month low of 110.50. The safe haven gains sparked interest over how much higher can the currency go before policy makers take actions to weaken it.

    Elsewhere, the Australian and New Zealand dollars lost ground, with AUD/USD tumbling 0.84% to 0.7542 and with NZD/USD falling 0.83% to 0.6776. On Tuesday, the Reserve Bank of Australia left interest rates unchanged, but stressed the probability for further cuts in the future. Another report released on the same day indicated that the country’s trade deficit widened to A$3.410 billion in February, compared to an upwardly revised reading of A$3.156 billion a month before. 

    Meanwhile, USD/CAD jumped 0.83% to trade at 1.3194, following the release of data revealing that Canada’s trade deficit widened to C$1.91 billion in February, from a downwardly revised reading of C$0.63 billion in the previous month. Analysts expected the figure to widen to C$0.90 billion in the reported period.

    The U.S. dollar index, which tracks the greenback’s performance against a group of six other counterparts, was higher 0.12% at 94.71, still near to last week’s five-and-a-half month trough of 94.30.

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