The U.S. dollar or the greenback as many people call it declined on Tuesday. The U.S. currency fell after U.S. inflation data showed consumer prices rose by 8.5% in March compared to a year ago, supported by soaring gasoline, but tempered by less expensive used cars as well as trucks.
The initial readout came in fractionally hotter than analysts anticipated. However, the U.S. consumer price index (CPI) reported the biggest monthly rise in consumer prices in decades. It is worth noting that the data showed some signs that inflation may have peaked. The core consumer price index fell short of estimates, landing at 6.5%.
Dollar and the euro
The dollar index, which tracks the U.S currency against a basket of currencies declined 0.146%, with the euro down to $1.0881.
The single currency also declined on Tuesday as markets shifted their attention to a European Central Bank (ECB) meeting. Policymakers from the ECB will discuss the situation this week.
Any rebound in the single currency will likely be limited by the ongoing war in Ukraine. In addition to pushing up gasoline prices, the war between Russia and Ukraine led to a global surge in food prices. Both countries are major exporters of commodities such as wheat and sunflower oil.
Russia invaded Ukraine more than a month ago. Unfortunately, the war is not over yet. The situation in Mariupol as well as in other cities is hard to describe in several words due to the scale of the destruction.
While negative, it recovered some of its post-French election gains on Tuesday. The euro rose against the U.S. dollar on Monday. The single currency rallied to $1.09550 following the news that Emmanuel Macron beat far-right challenger Marine Le Pen in the first round of presidential voting.