• The dollar pulled away from five-month lows versus the yen early on Tuesday, with comments from U.S. Treasury Secretary Steven Mnuchin and higher debt yields giving the bruised greenback some breathing space.
Mnuchin told the Financial Times that he agreed with U.S. President Donald Trump's view that the dollar's strength in the short term was hurting exports, but that he also saw the currency's strength over the long term as a positive.
Mnuchin's comments were seen to have played down views expressed by the president, who noted last week that the dollar was too strong, sending it reeling.
- The dollar added to overnight gains and was up 0.3 percent at 109.190 yen. It had sunk to a five-month trough of 108.130 earlier on Monday on investor wariness towards tensions in the Korean Peninsula.
Still, the dollar was not expected to go much further as the United States begins a first economic dialogue with Japan later on Tuesday.
Concerns are that the United States could take a tough trade stance against Japan, which has been wary of Trump's complaints that it and other countries have artificially weakened their currencies.
- The dollar index against a basket of major currencies was up 0.1 percent at 100.360 .DXY.
- The euro was steady at $1.0643 EUR=, having seen limited movement on Monday, when many European markets were shut for the Easter holiday.
• The Atlanta and New York Federal Reserve banks downgraded their outlook for U.S. economic growth for the first quarter after disappointing data on retail sales and consumer prices in March.
- First-quarter gross domestic product was on track to grow 0.5 percent, which was lower than the 0.6 percent growth rate calculated on April 7, the Atlanta Fed said.
- The New York Fed said on Friday its first-quarter GDP forecast was 2.09 percent, down from 2.56 percent a week earlier.
• U.S. Vice President Mike Pence told business leaders in Seoul on Tuesday that the Trump administration will review and reform the five-year-old free trade agreement between the two countries.
Pence said the U.S. trade deficit has more than doubled in the five years since the U.S.-South Korea free trade agreement began and there are too many barriers for U.S. businesses in the country.
Pence's meeting in Seoul with business leaders comes before he heads to Tokyo later on Tuesday, where he will meet Japan's Finance Minister Taro Aso and kick off talks that Washington hopes will open doors for U.S.-made products.
• U.S. Treasury Secretary Steven Mnuchin said the Trump administration's timetable for tax reform is set to falter following setbacks in negotiations with Congress over healthcare, the Financial Times reported on Monday.
Mnuchin told the Financial Times in an interview that the target to get tax reforms through Congress and on President Donald Trump's desk before August was "highly aggressive to not realistic at this point".
• Benchmark Brent crude futures ended the session 53 cents lower at $55.36 while U.S. West Texas Intermediate (WTI) crude futures settled down 53 cents at $52.65 a barrel.
Crude oil prices slipped 1 percent on Monday in subdued trading after a long Easter holiday weekend, on news of rising U.S. shale production and profit-taking following three straight weeks of gains.
• On Monday, the Energy Information Agency (EIA) said U.S. shale production in May was set for its biggest monthly increase in more than two years, adding to worries that these increases would undermine efforts of the world's top producers to rein in a glut.
Reference: Reuters, CNBC
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