The dollar index retreated further to below 90 on Tuesday, the lowest on a closing basis since January 7th, amid renewed bets the Federal Reserve will not tight monetary policy anytime soon. Recent comments from several Fed officials helped to calm investors’ worries over a jump in inflation and the need to pull back support. Dallas Federal Reserve President Robert Kaplan said he does not expect interest rates to rise until next year and Federal Reserve Vice Chair Richard Clarida said the weaker-than-expected U.S. jobs report showed the economy had not yet reached the threshold to warrant scaling back the central bank’s massive bond purchases. In the absence of fresh catalysts, investors await minutes of the US Federal Reserve’s April meeting, due on Wednesday, for clues regarding the central bank’s tolerance for near- and medium-term inflation.
