Dollar Hits Six-Week Low

Gold prices have rebounded more than US$35 from its low hit before the policy decision to boost rates last Wednesday, while the dollar has fallen 1.7 per cent from its high of 101.71 hit the same day.

Lo said the yuan may also suffer from growing protectionist worries after G20 officials dropped a decade-old pledge to keep trade open in their post-meeting communiques on Saturday.

The People's Bank of China on Tuesday set the yuan daily fixing against the United States dollar weaker for a fourth day.

Fed chairman Janet Yellen's cautious guidance last week had investors pricing in nearly no chance of another rate rise at the next policy meeting in May and is seen rising to 50-50 for June.

"U.S. stocks valuations are getting really expensive, so I expect the market to be capped for now".

In Europe, the Stoxx 600 Index rose Friday to bring its gain for the week to 1.4 percent. Since then concerns around the pace of US President Donald Trump's policy agenda have led many to unwind those bets this year, putting downward pressure on the currency.

"With tax reform and infrastructure spending getting pushed to the end of this year or even next year, it will eventually weigh on sentiment and business confidence", said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

The U.S. dollar has also taken a hit since the Fed meeting last week.

Last week, the Dow Jones Industrial Average squeezed out a gain of nearly 0.1 percent, the Standard & Poor's 500 Index rose 0.2 percent, and the Nasdaq Composite Index climbed 0.7 percent.

The FTSEuroFirst index of leading 300 European shares fell 0.2 percent to 1,489 points, Britain's FTSE 100 fell 0.2 percent and Germany's DAX fell 0.3 percent.

Gold dipped on Tuesday as a weaker dollar only partially offset a price retreat seen in Asian trading hours, after a failure to overcome chart resistance prompted speculative selling after a four-day rally. Prices of oil, one of Canada's major exports, fell on concerns that growing USA crude output could hamper an Organization of the Petroleum Exporting Countries-led production cut deal.

Brent crude was last down 6 cents, or 0.12 percent, at $51.7 a barrel. According to Bankrate.com chief analyst Greg McBride notes that it is the "cumulative" effect that we have to watch, particularly since the Fed had already raised interests in the two previous December months (2016 and 2015).

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