The dollar fell Tuesday after data showed that U.S. job openings fell in March, a day before the Federal Reserve is expected to hike interest rates by an additional 25 basis points.<\/p>\n
U.S. job openings fell for a third straight month and layoffs increased to the highest level in more than two years, suggesting some softening in the labor market that could aid the Fed’s fight against inflation.<\/p>\n
The U.S. Commerce Department also said that factory orders rose by 0.9% in March, below expectations for a 1.1% gain.<\/p>\n
The data comes as investors try to gauge whether the Fed is likely to pause rate hikes when it concludes a two-day meeting on Wednesday, or if further increases are possible if inflation remains high.<\/p>\n
\u201cThe big question is does the Fed signal that policy is restrictive enough, or provide enough hints for the market to think that we\u2019re not going to require the further tightening of policy,\u201d said Edward Moya, senior market analyst at OANDA in New York.<\/p>\n
The\u00a0dollar index<\/a><\/span>\u00a0fell 0.22% to 101.93 after earlier reaching 102.40, the highest since April 11. The euro rose 0.23% against the greenback to $1.1001, after earlier dipping to $1.0940, the lowest since April 21.<\/p>\n The single currency fell after data showed that euro zone banks are turning off the credit taps and a key gauge of inflation is finally falling, boosting the case for a smaller rate increase by the European Central Bank on Thursday.<\/p>\n The ECB has been seen as possibly hiking rates by 50 basis points this week. The single currency has risen since mid-March on expectations that the interest rate differential with the U.S. dollar will continue to shrink.<\/p>\n “The expected forward US rate advantage versus the euro is the lowest in 10 years,” Steve Englander, head, global G10 FX research and North America macro strategy at Standard Chartered (OTC:SCBFF<\/a><\/span>) Bank said in a note. And “euro-area equities are experiencing the most extended outperformance versus US equities in a decade.”<\/p>\n