The dollar edged higher on Tuesday as investors consolidated positions, a day after fresh political turmoil in Washington caused the US currency to post its biggest monthly drop in 16 months.
Uncertainty was expected to continue weighing on the dollar, following the US president Donald Trump's ousting of the White House communications chief Anthony Scaramucci on Monday, 10 days after he was hired.
"I think the short dollar trade is still the broad consensus trade in the financial markets," said Esther Maria Reichelt, an FX analyst at Commerzbank in Frankfurt.
"But we are approaching important levels against other currencies, such as 1.20 on the euro, which may prompt some concerns from other central banks."
Broader markets have focused on the euro's rise against the dollar - more than 12 per cent so far this year -, but other developed-market currencies have gained as well.
The Swedish and Norwegian crowns have strengthened, and sterling reached an 11-month high against the dollar on Tuesday after UK manufacturing data.
Expectations the Fed will raise US interest rates again have dropped to around 47 per cent compared with a 50 per cent probability a month ago, according to CME's Fedwatch tool.
But recent data showed the US economy may be doing better than expected, and a PMI survey due later on Tuesday from the United States is expected to suggest US manufacturing continued to expand in July.
PMI data from other parts of the world released on Tuesday were also encouraging. They showed euro-zone growth remained buoyant, British manufacturing recovered from a seven-month low and Chinese factory activity unexpectedly expanded.
"The Trump discount trade on the dollar has gained a fair bit of momentum in recent weeks but with a busy data week ahead, there is some consolidation," said Hans Redeker, a strategist at Morgan Stanley in London.
An index measuring the dollar's value against a basket of six major currencies fell to its lowest levels since May 2016 on Monday and was trading a shade above that at 92.96 on Tuesday.
The index fell in July, its fifth consecutive monthly decline and the longest such stretch since December 2010 through April 2011. On a monthly basis, it was the biggest drop since March 2016, according to Reuters data.
The US core personal consumption expenditures price index is due later on Tuesday, with the highlight of the US data week being Friday's jobs report.
* Reuters
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Zidane's managerial achievements
La Liga: 2016/17
Spanish Super Cup: 2017
Uefa Champions League: 2015/16, 2016/17, 2017/18
Uefa Super Cup: 2016, 2017
Fifa Club World Cup: 2016, 2017
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Power: 400hp
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Tightening the screw on rogue recruiters
The UAE overhauled the procedure to recruit housemaids and domestic workers with a law in 2017 to protect low-income labour from being exploited.
Only recruitment companies authorised by the government are permitted as part of Tadbeer, a network of labour ministry-regulated centres.
A contract must be drawn up for domestic workers, the wages and job offer clearly stating the nature of work.
The contract stating the wages, work entailed and accommodation must be sent to the employee in their home country before they depart for the UAE.
The contract will be signed by the employer and employee when the domestic worker arrives in the UAE.
Only recruitment agencies registered with the ministry can undertake recruitment and employment applications for domestic workers.
Penalties for illegal recruitment in the UAE include fines of up to Dh100,000 and imprisonment
But agents not authorised by the government sidestep the law by illegally getting women into the country on visit visas.
Killing of Qassem Suleimani
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
'The Sky is Everywhere'
Director:Josephine Decker
Stars:Grace Kaufman, Pico Alexander, Jacques Colimon
Rating:2/5
Ticket prices
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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Director: Simon Curtis
Cast: Hugh Bonneville, Elizabeth McGovern, Maggie Smith, Michelle Dockery, Laura Carmichael, Jim Carter and Phyllis Logan
Rating: 4/5
