Euro Gains as Germany Ends Fiscal Conservatism

The dollar weakened against the euro as Germany's parliament approved a significant spending increase, marking a shift from fiscal conservatism to stimulate economic growth. Attention was on the Federal Reserve's policy meeting for insights into U.S. interest rates. Meanwhile, investor sentiment in Germany improved unexpectedly.

In a notable market shift, the dollar eased against the euro on Tuesday following Germany's parliamentary approval of a massive spending increase aimed at boosting economic growth and military spending. This move marks a departure from decades of fiscal conservatism and stimulates the euro, which rose 0.2% to $1.0945 after earlier highs.

Investor attention was keenly focused on central bank actions, with major announcements expected. The Federal Reserve commenced its March policy meeting amid persistent inflation concerns, although analysts predict it will maintain its monetary policy. Observers anticipate new economic projections from Fed officials to gauge the potential impacts of current U.S. policies.

In the broader currency market, activity remained subdued ahead of announcements from the Federal Reserve and other significant central banks. Meanwhile, the Australian dollar and Bitcoin experienced dips, with the Australian dollar down 0.4% and Bitcoin dropping by 2.5%, reflecting broader market uncertainties.

(With inputs from agencies.)