Dollar hovers near three-week troughs as traders await inflation data

The dollar languished near a three-week low against major peers on Tuesday, pressured by a decline in Treasury yields as traders waited for the highly anticipated U.S. inflation data later in the day. 

The dollar declined with U.S. yields this month after rallying to multi-month peaks on hopes that massive stimulus and continued monetary easing will lead to a faster U.S. economic growth and higher inflation.

The dollar index rose slightly higher to 92.170 in early Asian trade, but still near Thursday’s low of 91.995. It rallied to a near five-month high of 93.439 on the last day of March.

The 10-year U.S. Treasury yield traded at 1.6764% on Tuesday. It rose to a more than one-year high of 1.7760% on March 30.

Analysts forecast the dollar to trade in the $1.17 to$1.20 range against the euro. It last stood at $1.1904, near its lowest level since March 23.

Against the Japanese yen, the dollar stood at 109.49 after dropping below 109 last week, its weakest since March 25.