The euro currency recorded gains as the US dollar fell in early trading on Tuesday, amid expectations among dealers to cut interest rates in the United States soon due to concerns about local banks there, while an interest rate increase of 50 basis points is still an option during the European Central Bank meeting next week.
The euro rose above $1.10 overnight and reached $1.1062 in early Asian trading. Trading volumes declined due to the holidays in Australia and New Zealand and ahead of the central bank meetings in Japan on Friday and the United States and Europe next week.
Isabelle Schnabel, a member of the ECB's executive board, told Politico that a 50 basis point rate hike was not ruled out and that it would depend on the data - in particular inflation figures due to be published two days before the May meeting.
The euro recorded the highest level in eight years against the Japanese yen at 148.47 yen, amid signals from the Governor of the Bank of Japan (central) Kazuo Ueda that he is not in a hurry to make a shift in monetary policy. The current meeting of the Bank of Japan, which ends next Friday, is the first meeting under his leadership.
