The U.S. dollar recovered lost ground on Tuesday as trading desks returned to full strength and underlying trends for its continued rise reappeared, although it remains hemmed in to tight ranges by mixed economic data.
A surprising move by the Reserve Bank of Australia not to cut interest rates boosted the Aussie dollar, bucking the prevailing greenback rally.
That rally has stalled in the last month with disappointing U.S. economic data such as last week's weak jobs report underscoring a weak first quarter. Still, expectations for a recovery are putting a floor under the dollar.
"The bigger, broader pieces are that the U.S. economy should still outperform and the Fed is likely to raise interest rates sooner than everyone else. The dollar strength story is still intact, we're just in a pause because the dollar lacks a catalyst to push it to new highs," said Camilla Sutton, chief currency strategist at Scotiabank in Toronto.