Dollar's Dance: Inflation Data and Fed Signals Stir Currency Markets

The U.S. dollar strengthened against major currencies as the euro faced pressure from weaker inflation data. Markets mostly shrugged off the U.S. capture of Venezuelan President Nicolas Maduro. Divergent Federal Reserve views on interest rates added uncertainty. Commodity and stock markets captured the day's focus.

The U.S. dollar gained slightly against major currencies on Tuesday, pressured by weaker inflation figures for the euro. Despite the political upheaval in Venezuela, currency markets appeared largely unaffected. Analysts suggested that the commodity and equity markets claimed most of the day's investor attention.

Investors are closely observing varying comments from Federal Reserve officials regarding monetary policy. Richmond Fed President Tom Barkin emphasized the importance of data-driven interest rate changes, while Fed Governor Stephen Miran advocated for aggressive cuts. These contrasting positions have left the market speculative about future policy adjustments.

Meanwhile, the euro fell 0.25% following disappointing inflation data from Germany and France. Traders anticipate the European Central Bank will maintain steady rates this year. The pound also retreated on concerns of similar inflation trends, while the dollar saw gains against the Swiss franc, yen, and other currencies.

(With inputs from agencies.)