The dollar rose in a calmer environment on Tuesday after falling on Monday following the collapse of Silicon Valley Bank (SVB).
Consumer Price Index (CPI) figures, due at 1230 GMT, could trigger further volatility in global markets, a day after fears of a possible banking crisis prompted traders to quickly reduce their expectations of interest rate hikes by the Federal Reserve.
The euro fell 0.08 percent to $1.072, while the greenback rallied. On Monday, it hit one-month highs of $1,075 and advanced 0.85% throughout the session.
Against Japan, the U.S. currency rose 0.61 percent to 134.02 yen, reversing some of the 1.38 percent drop the day before.
“We’ve seen some pullback from dollar losses overnight, but it’s pretty partial,” said Alvin Tan of RBC Capital Markets. “Ahead of us we have, of course, today’s CPI reading, which is quite important because it’s basically the last data before next week’s (Fed decision).”
Over the weekend, U.S. authorities launched emergency measures in response to SVB’s collapse, promising to protect depositors in an attempt to shore up bank confidence. U.S. President Joe Biden vowed Monday to take steps to ensure the security of the banking system.
The Dollar Index, which compared the greenback to a basket of six major currencies, gained 0.11 percent to 103.79 after losing 0.94 percent the day before.
Sterling was down 0.28 percent at $1.215 after advancing 1.22 percent on Monday. Data released on Tuesday showed UK wage growth slowed in the three months to January.