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RATE DOLLAR - SINGAPORE. The dollar bounced off a two-year low on Tuesday as selling pressure faded ahead of a Federal Reserve meeting and as political wrangling over the next U.S. fiscal rescue package moved closer to a conclusion.
The world's reserve currency has been tumbling since May and was dumped in recent days as cracks in the U.S. coronavirus recovery and crumbling yields sent investors elsewhere.
Buyers crept out of the woodwork following a pullback in the gold price halfway through the Asian session, lending the greenback support and pushing other majors off milestone peaks.
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The New Zealand dollar touched an eight-month top of $0.6702 and then dipped back to $0.6656, while sterling retreated from a four-month high to sit at $1.2850.
The Japanese yen weakened 0.3% to sit just below its strongest since mid March at 105.65, and the euro was last 0.2% softer at $1.1725. The Aussie dollar gave up early gains dip 0.2 to $0.7133.
Most analysts say the reasons for the dollar's broad decline, especially falling real yields, remain intact but that the pace of the drop probably warranted a pause - particularly with a Fed meeting and a U.S. spending package in the offing.
"Perhaps it is a case of the market running ahead of itself," said Moh Siong Sim, currency analyst at the Bank of Singapore.
On the horizon is a Fed meeting that begins later on Tuesday and Friday's deadline for U.S. Congress to extend unemployment benefits - both unpredictable enough to inject some nerves into bets against the dollar.
Against a basket of currencies the dollar lifted from a two-year low of 93.492 to hit 93.918. Still, it is down 3.6% in July and will need a stronger bounce to avoid posting its worst month in almost a decade.
