Forex – Dollar Erases Gains Vs. Rivals in Cautious Trade

Dollar pulls back from session highs ahead of Trump speech – The U.S. dollar erased gains against other major currencies on Tuesday, as investors were cautious ahead of the U.S. State of the Union speech due later in the day and the Federal Reserve’s monthly policy decision on Wednesday.

Later Tuesday, U.S. President Donald Trump was set speak to Congress in his first official .

Comments from the White House recently weighed on the greenback, especially after U.S. Treasury Secretary Steven Mnuchin said that for American trade.

However, President Trump contradicted Mnuchin’s position by defending the need for a strong currency. Traders fear the U.S. administration may use currency policy as a tool to get better trade deals with other countries.

Market participants were also looking ahead to the Fed’s upcoming on Wednesday for potential indications on the pace of interest rate hikes this year. The U.S. central bank is widely expected to raise rates three times in 2018.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.09% at 89.09 by 05:15 a.m. ET (19:15 GMT), off session highs of 89.47.

was up 0.11% at 1.2396, while slid 0.37% to 1.4067 after leaked government papers showed that under all three likely Brexit scenarios.

Preliminary data on Tuesday showed that gross domestic product in the euro zone in the fourth quarter.

The yen and the Swiss franc were higher, with down 0.26% at 108.67 and with shedding 0.37% to 0.9340.

Elsewhere, the Australian and New Zealand dollars were little changed, with at 0.8087 and with at 0.7324.

Meanwhile, edged down 0.10% to trade at 1.2328.

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