Early trade in New York: Dollar retreats as riskier currencies rebound

NEW YORK: The US dollar fell across the board as riskier currencies found a firmer footing on Tuesday, a day after worries over vaccine rollouts and the outlook for US fiscal stimulus boosted demand for safe havens.

Mounting coronavirus cases and caution ahead of the US Federal Reserve’s policy meeting this week has dulled appetite for risk, lending support to the dollar against a basket of currencies in recent sessions, but investors were once again nibbling at riskier currencies on Tuesday.

The US Dollar Currency Index was 0.19% lower at 90.173. The index rose as high as 90.614, its strongest since Jan. 20, earlier in the session.

The dollar appeared to be taking its cue from overall risk sentiment in the market, said Michael Brown, senior analyst at payments firm Caxton, in London.

On Tuesday, the Australian dollar - seen as a liquid proxy for risk - was 0.48% higher against the dollar; the New Zealand dollar was up 0.65%.

Elsewhere, emerging-market currencies saw an easing of recent selling pressure with the Brazilian real rising more than 1%.

Sterling pulled away from a one-week low against the dollar.