WASHINGTON (dpa-AFX) - The U.S. dollar gained against most of its rivals on Tuesday, extending recent upside, as risk sentiment improved after several countries across the world started to reopen businesses gradually.
The dollar index rose to 99.97 in Asian trading, and despite falling to around 99.50 after the session started in New York, recovered to 99.80, gaining more than 0.3% from previous close.
The dollar's uptick was also due to a weak euro. Germany's apex court ruled that the European Central Bank's mass bond-buying to support the euro area partly violates the German constitution.
The court said that the Bundesbank must stop buying government bonds within three months unless the ECB proves that those purchases are needed. It observed that the decision exceeded 'the monetary policy mandate of the ECB' and gave the central bank three months to take steps to amend the scheme.
The euro fell to $1.0826, a six-day low. After moving past $1.0880 subsequently, it retreated again, and was last seen at $1.0835, going down by about 0.6%.
Eurozone producer prices declined at a faster pace of 2.8% in March (year-on-year), data from Eurostat showed. That was also faster than the 1.4% decrease in February.
The pound sterling was trading at $1.2433, down from Monday's close of $1.2443. Data showed UK service sector contracted sharply in April. The IHS Markit/Chartered Institute of Procurement & Supply services Purchasing Managers' Index plunged to 13.4 in April from 34.5 in March.
Against the Yen, the dollar lost some ground with a unit fetching 106.54 yen, compared with 106.72 yen Monday evening.
The Aussie was marginally stronger against the greenback at $0.6434. The Loonie lost ground, easing to C$1.4049 a dollar, compared to $1.4087 on Monday. Canada's trade deficit widened to C$ 1.4 billion in March 2020 from a downwardly revised C$ 0.89 billion in the previous month.
Exports from Canada fell 4.7% from a month earlier to C$ 46.3 billion in March, the lowest level since January 2018, while imports Canada declined 3.5% from a month earlier to C$ 47.7 billion, the lowest since October 2017.
Against Swiss franc, the dollar was up more than 0.8% at CHF 0.9730. Swiss consumer confidence reached a historic low in April amid coronavirus pandemic, survey results from the State Secretariat for Economic Affairs, or SECO, showed. The consumer sentiment index fell to -39 in April from -9 points in January. The preliminary reading was -40.
On the U.S. economic front, the Institute for Supply Management released a report showing U.S. service sector activity contracted for the first time since December of 2009 in the month of April.
The ISM said its non-manufacturing index tumbled to 41.8 in April from 52.5 in March, with a reading below 50 indicating a contraction in service sector activity.
The non-manufacturing index slumped to its lowest level since hitting 40.1 in March of 2009 but still came in above economist estimates for a reading of 36.8.
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