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Dollar Retreats After Recent Gains

The U.S. dollar weakened a bit on Tuesday, but not before climbing to a four-month high against the euro and hitting a 1-1/2-month high against Swiss franc.

The dollar surged higher early on in the day on remarks from the Federal Reserve Chair Jerome Powell that the economy appeared resilient to the global headwinds and the current stance of monetary policy would remain appropriate.

Testifying before the House Committee on Financial Services, Powell said that some of the trade uncertainties have waned recently, but risks to the outlook remain.

The Fed is closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy, he said.

The Fed chief noted that the current stance of monetary policy would support continued economic growth, a strong labor market, and inflation returning to the 2 percent objective.

"As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy will likely remain appropriate," he added.

The dollar index rose to 98.95, but later dropped to a low of 98.71. It was last seen at 98.74, down by about 0.1% from previous close.

Against the euro, the dollar hit a high of $1.0893, but later eased to $1.0921, netting a marginal loss.

Against Pound Sterling, the dollar weakened to $1.2953, down 0.3% from Monday's close. The UK economy stalled in the fourth quarter as uncertainty around Brexit and the general election weighed on investment and spending, first estimates from the Office for National Statistics showed.

Gross domestic product remained unchanged from the previous three months, as expected, after expanding by a revised 0.5% in the third quarter.

The Japanese Yen was little changed against the dollar, after moving between 109.73 yen and 109.96 yen.

The Aussie was notably higher against the dollar at 1.3290.

The dollar was weak against the loonie and Swiss franc at 1.3290 and 0.9757, respectively.

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