Currency – The dollar extends its gains, but should be limited

© Reuters. The dollar extends its gains, but should be limited – The dollar rose on Tuesday against a basket of currencies, continuing its rebound from a low of three weeks last week, but the outlook remained clouded by concerns over the outlook for the u.s. budget deficit.

The dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.46% to 89,48 at 03:48 AM (08:48 GMT).

The index has fallen to 88,15 Friday, the weakest since December 2014.

The dollar has weakened in recent months, expectations of a faster pace of interest rate of the federal Reserve have been offset by a series of concerns.

The greenback has been hit by concerns that the large reductions in corporate tax and the increase in government spending will have a negative impact on the u.s. budget deficit, which is expected to swell to nearly $ 1 billion in 2019.

The tax cuts and spending plans could turn against the government by overheating an economy that is already strong and leading to renewed adverse inflation.

The expectations of a monetary tightening faster outside of the United States, which would reduce the divergences between the Fed and other central banks, have eroded the relative attractiveness of the dollar for investors.

The us dollar strengthened against the yen, with USD / JPY up 0.42% to 107,03, extending its decline from the lowest in 15 months of 105,55 reported Friday

The euro was in decline, with the EUR / USD lower by 0.3% to 1,2370 stepping back even more compared to the earlier three weeks of 1,2554.

The british pound was also lower, with GBP / USD down 0.26% to trade at 1.3962.

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