Dollar drops broadly, keeps euro underpinned near recent high
The dollar dropped broadly on Tuesday, as lower U.S. Treasury debt yields drove investors to trim bullish bets, giving a boost to the euro that has so far proven resilient despite talk of looser monetary policy from the region's central bank.
The greenback lost value against the euro, yen, Swiss franc and British pound on month-end portfolio rebalancing flows and as investors trimmed long positions, bets made on expectations the dollar will rise.
The dollar index, which is dominated in composition was last down 0.3 percent at 80.718.
Trade was thin ahead of Thursday's U.S. Thanksgiving Day. The dollar extended losses after data showed consumer confidence unexpectedly slipped in November, with the Conference Board consumer confidence index at its lowest since April.
"This dip in confidence could prove to be a short-term phenomenon if incoming economic data continues to diverge as it has in recent weeks," said Christopher Vecchio, currency analyst at DailyFX in New York. "Overall, there's been little translation between a decline in confidence and the broader economy so far," he said.
The euro was last trading up 0.3 percent at $1.3554, having hit a session high of $1.3571 and triggering stop loss buy orders above $1.3560. Near-term resistance is at its Nov. 20 high of $1.3577. Part of the reason for the euro holding up is speculation that euro zone inflation, due later in the week, could show a slight rise in prices and push back expectations that the European Central Bank will take further action to fight disinflationary pressures in the near term.
The dollar last traded down 0.3 percent at 101.38 yen.
For more information on currencies, please click here.