Investing.com -- The U.S. dollar gained slightly against the euro on Tuesday temporarily slowing a rapid depreciation, as consumer prices in the U.S. for February rebounded from the previous month.
EUR/USD dipped 0.15% or 0.0016 in U.S. afternoon trading to 1.0931. Earlier on Tuesday morning, the pair moved above 1.10 for the first time in more than two weeks while reaching a daily high of 1.1030. Trading wavered throughout the day, plunging at one point to 1.0892.
On Mar. 5, EUR/USD fell to 1.0987, marking the first time in 12 years that the pair slipped below 1.10. Expectations of an interest rate hike from the Federal Reserve coincided with the start of a €60 billion a month bond buying program, spurring one of the sharpest falls in the pair in years. By Mar. 13, EUR/USD had reached a level around 1.05.
Just as quickly as the euro plunged, it nearly reversed all of the losses in recent days following relatively dovish comments by Fed chair Janet Yellen on slower than expected inflation and GDP growth.
The Labor Department on Tuesday said its Consumer Price Index (CPI) rose 0.2% for February, one month after declining 0.1%. The slight uptick last month ended a three-month streak of declines. On a year-over-year basis the CPI remained unchanged from its February 2014 level, though analysts had forecasted it to slip by 0.1% from last year's figure.
Yellen indicated the Federal Open Market Committee (FOMC) will take a "data-driven" approach on the timing of its first interest rate hike since 2009. The Fed would like inflation to approach its target goal of around 2% before it raises its benchmark Federal Funds Rate.
Speaking in England on Tuesday, Federal Reserve Bank of St. Louis president James Bullard emphasized that the timing is right to hike rates above their current level of near 0%.
"Zero is no longer the appropriate interest rate for the U.S. economy," Bullard said during a panel session at London City Week.
Echoing comments made by Federal Reserve vice chairman Stanley Fischer a day earlier, Bullard indicated that the policy actions from the Fed could be "extremely accommodative," to market conditions and that lift-off could begin with small increases. In its report released last week, the FOMC forecasted that interest rates could rise over the next several years at a rate slower than had previously been anticipated.
Elsewhere, there was little progress between Greece and its euro zone creditors one day after Greece prime minister Alexis Tsipras and Germany chancellor Angela Merkel put on a public display of goodwill during Tsipras' first visit to Berlin since he was elected earlier this year.
Back in Athens, Greek citizens continued to digest the resignation of Greece's bank-fund chairman Christos Sclavounis on Monday. The Hellenic Financial Stability Fund, headed by Sclavounis, received more than €48 billion in bailout funds between 2012 and 2014.
Greece is running out of time before its next debt payments are due. On April 8, Athens owes the International Monetary Fund more than €460 mil on a loan from its 2010 bailout. Five days later, Greece must make a €1.4 billion payment to holders of its short-term treasury bills.
Meanwhile, the yield on the German 10-Year bunds rose 0.01 to 0.23, while yields on the U.S. 10-Year Treasuries fell 0.04 to 1.875.