The dollar dropped against the euro and the yen early Tuesday, as renewed fears from China data reinforced doubts on the global economy.
The euro was recently up 0.1% against the dollar to $1.1035. The dollar fell 0.3% to ¥112.78.
In a policy meeting later this week, The European Central Bank is expected to cut interest rates further into negative territory. This would be a move that put downward pressure on the euro. However, there are doubts among analysts and investors about the extent of the new stimulus methods. “Investors have been badly burned in the past by the bank’s halfhearted response,” said analysts at Commonwealth Foreign Exchange on Tuesday. “As such, euro bears remain hesitant to bet too heavily against the single currency.”
In yen’s move, analysts attributed the appreciation to a demand for safer assets following China’s disappointing trade figures.
The dollar was recently up 1.7% against the Russian ruble to 72.68. It gained 0.8% against the Mexican peso to 17.89.
In Wall Street, stocks slipped on Tuesday as crude oil prices dropped along with a global economic slowdown led by the world's second-biggest economy.
The recent China’s trade performance was much worse than economists had expected, with exports tumbling the most in over six years.
"The data this morning has dampened sentiment more so than anything else at this point in terms of confirming some of the concerns regarding growth in China," said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management in Chicago.
"Equities, at least in the United States, are somewhat taking their cues from oil pulling back slightly," Larson said.
Even though crude oil price has made a strong recovery last week, analysts warned on Tuesday that the recent rally was not a trend of the price as the price would need to remain low to rebalance the market later in the year.