Investing.com - The dollar was broadly lower against a basket of other major currencies on Tuesday, as investors eyed U.S. data to be released later in the day, while uncertainty over the timing of a U.S. rate hike continued to weigh.
The dollar remained under pressure amid uncertainty over the path of U.S. monetary policy after the Federal Reserve downgraded its forecasts for growth and inflation and lowered its interest rate projections last week.
Fed Vice Chair Stanley Fischer said Monday that it is "widely expected\" to begin raising interest rates this year though the policy path remains uncertain.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.23% to 96.98.
EUR/USD gained 0.51% to 1.0997 after research group Markit said its composite purchasing managers index, which measures activity in the manufacturing and services sectors, rose to 46-month high of 54.1 in March from 53.3 in February.
The report showed that both new order growth and job creation rose at the fastest pace since mid-2007.
Germany’s private sector expanded at the fastest rate in eight months, but growth in France’s private sector eased this month.
The pound edged lower, with GBP/USD slipping 0.23% to 1.4919.
In a report, the U.K. Office for National Statistics said the rate of consumer price inflation decelerated to 0.0% last month from 0.3% in January, compared to expectations for a 0.1% reading.
Bank of England Governor Mark Carney will now have to write an open letter to the Chancellor of the Exchequer, George Osborne, as inflation is more than a percentage point below the central bank\'s target of 2.0%.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at rate of 1.2% last month, down from 1.4% in January and below forecasts for a reading of 1.3%.
Elsewhere, the dollar was lower against the yen and the Swiss franc, with USD/JPY falling 0.32% to 119.33 and with USD/CHF dropping 0.91% to 0.9573.
The Australian, New Zealand and Canadian dollars gained some ground, with AUD/USD up 0.23% to 0.7898 and NZD/USD adding 0.14% to 0.7663, while USD/CAD slid 0.34% to trade at 1.2480.
The commodity-linked currencies showed little reaction to data earlier showing that Chinese manufacturing activity swung into contraction territory this month.
The HSBC (LONDON:HSBA) Flash Manufacturing Purchasing Manager\'s Index fell to an 11-month low of 49.2 from a reading of 50.7 in February, compared to expectations for a downtick to 50.6.
Later in the day, the U.S. was to release reports on consumer inflation and new home sales.