2023.05.3020:57:00UTC+00Dollar Retreats After Early Uptick, Posts Losses Against Some Major Rivals

After climbing higher and hitting multi-month highs against some of its major counterparts, the U.S. dollar retreated on Tuesday as traders weighed the prospects of the debt ceiling agreement getting the nod from the Congress.

President Joe Biden and House Speaker Kevin McCarthy, R-Calif., reached an agreement in principle on Saturday to raise the debt ceiling and avoid a potentially disastrous default by the U.S. government.

A source familiar with the negotiations told CNN the agreement in principle will raise the debt ceiling for two years and keep non-defense spending roughly flat for fiscal 2024 and increase it by 1 percent in fiscal year.

Meanwhile, there are concerns the agreement is likely to face opposition from some Republicans who were seeking bigger spending cuts, potentially prolonging the process of passing the bill. Also, traders looked ahead to the monthly jobs report on Friday amid concerns about further interest rate hikes.

In economic news, consumer confidence in the U.S. saw a modest decrease from an upwardly revised level in the month of May, according to a report released by the Conference Board.

The Conference Board said its consumer confidence index edged down to 102.3 in May from an upwardly revised 103.7 in April.

Economists had expected the consumer confidence index to slip to 100.0 from the 101.3 originally reported for the previous month.

The dollar index, which dropped to 103.88, recovered to around 104.25, but retreated again and was last seen at 104.06, down 0.14 percent from the previous close.

Against the Euro, the dollar has weakened to 1.0735 from 1.0708. The dollar has eased to 1.2413 against Pound Sterling, from 1.2356.

Against the Japanese currency, the dollar is trading at 139.79 yen, retreating from 140.45 yen. The dollar is trading at 0.6517 against the Aussie, firming from 0.6538.

Against Swiss franc, the dollar is up, fetching CHF 0.9059 a unit, compared to the previous close of CHF 0.9044. The dollar is down against the loonie at C$ 1.3600.