2014.02.2606:30:43UTC+00Dollar falls versus euro, yen after weak US consumer figures

The US dollar plunged versus a basket of major currencies on Tuesday as mild US consumer confidence data pushed bond yields lower but remained strong against the Yuan, following China's currency posted its largest fall in three years.

The Conference Board's index of consumer attitudes dropped 78.1 in February, from 79.4 in January. The yield on the benchmark US 10-year Treasury note sank to a session low of 2.7%, indicating greater bids for the safe haven bond in response to the soft data, agitating the dollar. The dollar index, a gauge of the dollar versus a basket of major peers, went down 0.08% at 80.14.

However, it withheld profits versus the yuan that reported its largest drop in three years and went below its official midpoint rate on moves by China to lump easy betting on the currency. The dollar last went up 0.03% versus yuan which traded at 6.1266.

Spot yuan has entered an emphatic weakening cycle in the recent weeks, carried on downward by a series of weak fixings by the People's Bank of China (PBOC), with further momentum accrued to the glide by the unwinding of yuan positions by Chinese banks.

The dollar plummeted slightly versus the euro, which gained 0.04% at $1.3741. The dollar fell 0.36% against the Japanese yen which traded at ¥102.13. The dollar index has profited 0.1% this year following weak US economic figures on hiring, retail sales, and housing drove bond yields lower and diminished demand for the US currency.

Some investors shrugged off the anemic data on the belief they were a direct effect of freezing temperatures and snow storms throughout the nation this year. The euro profited following the closely monitored German Ifo survey failed to meet expectations on Monday. The advantages against the dollar seeded amid new European Commission predictions which estimated 1% inflation this year and 1.3% in 2015, way short of the European Central Bank's 2% target.

In a week lacking main economic data, all eyes will be on the first estimation of euro zone February inflation on Friday. Past few months' numbers reflected price growth slipping below 1%, hardening the case for more move by the European Central Bank to cultivate growth.