2021.01.2621:10:00UTC+00Dollar Weakens Against Other Major Currencies

The U.S. dollar retreated after early gains on Tuesday, as traders continued to closely track the progress on the stimulus front, reacted to geopolitical and the latest batch of economic data from across the world.

A report from the Conference Board showed an unexpected improvement in U.S. consumer confidence in the month of January. The Conference Board said its consumer confidence index climbed to 89.3 in January from a downwardly revised 87.1 in December.

Economists had expected the index to edge down to 88.5 from the 88.6 originally reported for the previous month. The unexpected rebound by the headline index came as the expectations index jumped to 92.5 in January from 87.0 in December.

On the stimulus front, U.S. President Joe Biden said he's open to negotiations on his $1.9 trillion Covid-19 relief proposal, but didn't rule out pursuing a Democrat-only route for passage.

U.S. Senate Majority Leader Chuck Schumer said earlier Monday an aid package was unlikely before mid-March, just when jobless benefits from the last package will be running out.

A number of GOP Senators have expressed skepticism about the need for additional stimulus after recently approving a $900 billion relief package.

The dollar index, which rose to 90.61 in the Asian session, touched a low of 90.12 in late morning trades before edging up to 90.16, still down by over 0.25%.

Against the Euro, the dollar weakened to $1.2166, down 0.2% from previous close of $1.2143.

The Pound Sterling was stronger, fetching $1.3739 a unit, nearly 0.5% up from Monday's $1.3676. The U.K. unemployment rate increased and the employment rate continued to decline in three months to November, labor force survey results from the Office for National Statistics showed.

The jobless rate rose 0.6 percentage points from the previous quarter to 5% in three months to November. The expected rate was 5.1%. At the same time, the employment rate dropped 0.4 percentage points sequentially to 75.2%. Employment decreased by 88,000 on the quarter.

The Yen firmed up to 103.61 a dollar, advancing from 103.77 a dollar. Minutes of the Bank of Japan's December meeting showed some discussions on the topic of exchange rates and further policy easing in light of the economic stresses caused by the pandemic.

Against the Aussie, the dollar weakened to 0.7747, drifting down from 0.7713.

The Swiss franc firmed up to CHF 0.8865 a dollar from CHF 0.8885, while the Loonie strengthened to 1.2694 a dollar from 1.2740.