INGAPORE- The dollar held on to small overnight gains on Tuesday as investors weighed whether an accommodative turn from the European Central Bank later this week could hit the euro, while the pound nursed losses due to Brexit uncertainty.
In thin holiday trade the greenback had edged 0.2 percent higher against a basket of currencies and rose by roughly the same margin against the euro to $1.1816.
Moves early in the Asian day were modest, but had the dollar back under gentle pressure as risk appetite appeared to return to equity markets.
The Australian dollar rose 0.1 percent to $0.7280 and the New Zealand dollar also lifted very slightly from overnight lows hit following a Sunday statement from the central bank which again raised the prospect of negative rates.
The main focus this week is on the European Central Bank’s policy decision on Thursday.
Most analysts don’t expect a change in the bank’s policy stance but are looking to the message on its inflation forecasts and whether it seems concerned by the euro’s strength.
The meeting comes after the euro marked a two-year high just above $1.20 at the beginning of the month, until comments about its level from ECB chief economist Philip Lane knocked it lower.