Dollar ticks up in range-bound session
SAN FRANCISCO (MarketWatch) -- The U.S. dollar traded near a one-month low Tuesday but ended the North American session slightly higher as investors focused on the next round of central bank moves.
The dollar index (DXY) , which measures the U.S. unit's performance against a basket of six major rivals, traded at 82.280, down from the day's high of 83.397, but up from 82.175 late Monday.
The WSJ Dollar Index, (BUXX) which gauges the greenback's moves against a basket of heavily traded currencies, hit a day's high trading at 71.50 and has since fallen to 71.44, up from 71.40 at previous close.
"Risk appetite is still there and it's really coming from the European Central Bank board member comments saying they're for purchasing bonds," said David Song, currency analyst for FXCM.
The euro (EURUSD) hit a day's high trading at $1.2442, before trading at $1.2397, little changed from $1.2400 Monday.
Mario Draghi, president of the European Central Bank signaled openness toward a bond-buying program in comments made last week, while opposition to the plan outside strict regulation was voiced by several German central bankers, including Bundesbank chief Jens Weidmann.
"We're seeing Weidmann and Draghi butt heads right now, but I'm thinking Draghi wins and asset purchases will happen," added Song. "The Bundesbank is fighting an uphill battle."
Remarks by Eric Rosengren, president of the Federal Reserve Bank of Boston, also came in for passing attention. He said the Federal Reserve should embark on an open-ended bond-buying program. Read more on Rosengren.
"Rosengren is the most dovish of all regional Fed presidents," said Andrew Cox, G-10 strategist for Citi. "I do not think that his comments will have a significant impact on the current debate at the Fed."
Rosengren isn't a voting member of the Federal Open Market Committee this year, but he will be in 2013.
Meanwhile, the Australian dollar (AUDUSD) reversed earlier gains, trading at $1.0556 after the Reserve Bank of Australia's decision to leave its key lending rate at 3.5%. The central bank cut the rate by a total of three-quarters of a percentage point in May and June. Read more on the aussie.
The British pound (GBPUSD) changed hands at $1.5620, up from $1.5615 on Monday. U.K. manufacturing output and industrial-production data revealed steep declines in June, but they still came in smaller than forecast, leaving some potential for a slight upward revision to U.K. second-quarter gross domestic product, economists said.