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Dollar drops marginally as data weighs


The dollar index, which measures the dollar against six of its peers, fell 0.04% to 103.8

The dollar dropped marginally on Tuesday after data showed slowing growth in the US jobs sector and as investors braced for a busy week that included a decision on interest rates, ECB, Congressional testimony from Fed Chair Jerome Powell, and US employment data.

Bitcoin reached a record high on Tuesday before dropping sharply during a volatile session. The world’s biggest crypto currency is up nearly 50% this year, with investors pouring money into US spot exchange-traded crypto products in anticipation of lower interest rates.

Bitcoin shed 7.04% to $62,745.23, after reaching $69,202.

Growth in the US labor sector slowed marginally in February amid falling employment, per the Institute for Economic Research (ISM). Separately, data showed that new orders for US manufactured goods dropped more than expected in January.

The ISM numbers today showed growth in the service sector slowed in February, in no small part due to a decline in employment levels, and that has raised some concerns about the strength of the U.S. economy, according to Stuart Cole, chief economist at Equiti Capital.

The dollar index dropped 0.04% to 103.8.

Most major currency pairs traded within the familiar range.

The G10 FX world remains incredibly subdued, said Michael Brown, market analyst at Pepperstone in London.

There is some reluctance from most market participants to trade with conviction ahead of Powell tomorrow, ECB on Thursday, and of course NFP (nonfarm payrolls) on Friday, which is probably exacerbating the quiet conditions at the start of the week, Brown added.

Fed chair Powell is likely to strengthen the message that the Fed wants to wait for more data before any rate reductions when he testifies before Congress on inflation and the economy on Wednesday and Thursday.

We should expect Fed Chair Powell to reiterate patience and emphasize (there is) no hurry to reduce rates, according to Christopher Wong, currency strategist at OCBC in Singapore.

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