By Yasin Ebrahim
Investing.com – The U.S. dollar fell on Tuesday, following a plunge in Treasury yields, as weaker U.S. consumer confidence raised questions about the strength of the economy at a time when traders are betting the rapid spread of Covid-19 may trigger a material change to the Fed's outlook on economy, forcing a flurry of rate cuts.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.37% to 98.92.
The United States 10-Year yield fell to record low of 1.307% in the wake of growing worries the potential impact on global growth from Covid-19 will be worse than expected, forcing the Fed to act in April, June and July.
The odds of April, May, and June rate cuts jumped to 56%, 77% and 86% respectively, according to Investing.com's Fed Rate Monitor Tool.
With new outbreaks in Asia, Europe and the Middle East stoking fears of a pandemic, investors piled into safe havens like the yen and Swiss franc.
USD/JPY fell 0.64% to $110.04 and USD/CHF fell 0.31% to 0.9757.
The dollar was also hurt by signs of a wobble in the economy as consumer confidence undershot economists' forecasts.
GBP/USD rose 0.60% to $1.3005 and EUR/USD rose 0.26% to $1.0882.
USD/CAD fell 0.15% to C$1.3272 even as the loonie was pressured by a slump in oil prices amid concerns about the virus' impact on Chinese oil demand growth.
The International Energy Agency's outlook on global oil demand growth has fallen to its lowest level in a decade, IEA Executive Director Fatih Birol said on Tuesday.