The U.S. dollar regained some strength amid cooler appetite for stocks and other assets perceived as risky following a Monday rally.
Monday’s risk appetite had been fueled by better-than-expected economic data from China, which pushed global stocks and currencies perceived as riskier, such as emerging markets, higher. China’s Caixin services purchasing managers index for March is due at 9.45 p.m. Eastern Time in Tuesday’s Asia hour trading.
The ICE U.S. Dollar Index DXY, -0.03% was last up 0.1% at 97.361.
The U.S. economic calendar was light for Tuesday. February durable goods orders contracted by 1.6%, less than expected, while core capital-expenditures orders for the same month slipped 0.1%.
The waning risk appetite left the Australian dollar AUDUSD, -0.1697% and New Zealand dollar NZDUSD, -0.0592% the worst G-10 performers of the session in early trading.
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For the Aussie dollar, Tuesday’s weakness appeared against the backdrop of better-than-expected economic data, including a jump in building approvals by 19.1%, where a 3.5% contraction was expected. The Reserve Bank of Australia left interest rates unchanged during its April meeting.
The Australian currency last bought $0.7063, down 0.7%.
In the U.K., Prime Minister Theresa May said a further, short delay to Brexit was necessary to ensure Britain was leaving the European Union with a deal. She also said she was open to sitting down with opposition Labour Party leader Jeremy Corbyn to find options for the future relationship between London and Brussels. This led the British pound GBPUSD, -0.0076% to retrace its earlier losses.
Sterling last bought $1.3114, up 0.1%.
On Monday, Parliament again voted on alternative Brexit plans, and none of the options managed to get a majority. The customs union proposal came the closest, falling three votes shy.
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“The risk of a national election appears to be growing as a way to break the logjam. It would be the third election in four years,” said Marc Chandler, chief market strategist and Bannockburn Global Forex.
By extension, the euro EURUSD, -0.0268% similarly exposed to Brexit risk but also struggling with economic growth issues of its own, spent Tuesday’s session in negative territory. It last fetched $1.1198, compared with $1.1216.
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