The dollar suffers losses as US interest rates reach their peak
Gold rises and focus turns to the US Central Bank
The dollar faced pressure during trading on Tuesday, and was trading at its lowest levels in several months against the euro and other major currencies at a time when investors expect US interest rates to decline next year and see this as a signal to sell the dollar as a precaution.
The movements were modest in early Asian trading, but the dollar index fell from its 200 moving average on Monday, as the rise in the Chinese yuan led to another round of significant declines for the US currency.
The dollar index, which measures the performance of the US currency against a basket of six major currencies, fell 1.9 percent last week in conjunction with a significant rise in US Treasury bond yields, and lost another 0.5 percent overnight to reach 103.44 points.
The euro touched its highest level in three months at $1.0952 on Monday thanks to limited help from European Central Bank board member Pierre Wunsch, who opposed market expectations of a cut in interest rates in April.
The yuan hit a three-month high against the dollar on Monday, thanks to the policies of the Chinese central bank. The Australian and New Zealand dollars also rose against the US currency. In weak external trading on Tuesday morning, the yuan rose and maintained its gains at 7.1640 to the dollar.
The Australian dollar rose slightly to $0.6561, slightly below the highest level in three months recorded yesterday, Monday, at $0.6564. The New Zealand dollar settled at $0.6040.
Even the yen rose to its highest level in seven weeks at 148.1 to the dollar overnight and settled at 148.3 dollars on Tuesday.
Regarding precious yellow gold, gold prices rose on Tuesday, supported by a decline in the US dollar and Treasury bond yields, while investors looked forward to reviewing the minutes of the last meeting of the Federal Reserve (the US Central Bank) to obtain more evidence regarding interest rate expectations.
Gold rose in instant transactions by 0.6 percent to $1,988.29 per ounce by 01:33 GMT. US gold futures increased 0.5 percent to $1,990.10.
US 10-year Treasury bond yields are hovering near their lowest levels in two months, which they touched last week.
