2021.05.2520:27:00UTC+00Dollar Extends Slide Against Peers

The U.S. dollar exhibited weakness against most of its major counterparts on Tuesday amid rising speculation the Fed will continue with its easy monetary policy.

Recent speeches from some Fed officials confirmed that the central bank is unlikely to tighten its policy anytime soon.

James Bullard, president of the St. Louis Federal Reserve, told Yahoo Finance in an exclusive interview that policymakers should not be too eager to pull back support yet as vaccinations bring the economy "closer and closer" to pre-pandemic form.

Other Fed officials Raphael Bostic and Lael Brainard also talked down inflation risks and described the recent demand-supply disruptions as transitory.

A report released by the Conference Board said the consumer confidence index edged down to 117.2 in May after climbing to a revised 117.5 in April.

Economists had expected the consumer confidence index to pull back to 119.5 from the 121.7 originally reported for the previous month.

New home sales in the U.S. showed a substantial decrease in the month of April, according to a report released by the Commerce Department. The report said new home sales slumped by 5.9% to an annual rate of 863,000 in April after jumping by 7.4% to a significantly downwardly revised rate of 917,000 in March.

Investors now await U.S. personal consumption data, the Fed's preferred inflation measure, due later this week.

The dollar index dropped to a multi-month low of 89.54 in the Asian session, and despite rallying to 89.85 by noon, faltered again and was last seen at 89.70, down 0.17% from the previous close.

Against the Euro, the dollar dropped to $1.2249, giving up more than 0.25%. Survey data from the ifo Institute showed that German business sentiment improved more than expected in May.

The business confidence index rose to 99.2 in May from 96.6 in the previous month. The reading was also above economists' forecast of 98.2.

Data from Destatis revealed that the German economy contracted slightly more than initially estimated in the first quarter due to the coronavirus pandemic, with the GDP falling 1.8% sequentially, in contrast to the 0.5% expansion seen in the fourth quarter.

The Pound Sterling firmed up, fetching $1.4143 a unit, compared with $1.4157 Monday evening.

The Yen was flat at 108.75 a dollar, recovering from a low of 109.07 it touched in early New York session.

The Aussie, which eased to US$0.7733, recovered subsequently and was down slightly at US$0.7750 a little while ago.

The Swiss franc firmed up to 0.8954 a dollar, gaining from 0.8972 a dollar, while the Loonie weakened to C$1.2065 a dollar, down 0.17% from the previous close of C$1.2044.