U.K. Annual CPI, BOE’s Bailey and ECB’s Lagarde Speak

The EUR/USD pair traded between gains and losses on Tuesday and ended the session with minor losses of 0.03%.

On Tuesday, Fed Chairman Jerome Powell said that the US economy's performance has been quite robust. Powell further stated that recent data indicates a lack of significant progress on inflation this year and it will take "longer than expected" to achieve the confidence that inflation will get down to the 2% target.

Housing Starts in the US fell 14.7% in March while the US Building Permits dropped 4.3% in February and Industrial Production rose 0.4% MoM in March.

Across the pond, there is growing speculation that the European Central Bank (ECB) will start lowering interest rates in June due to a weak. ECB President Christine Lagarde said on Tuesday that the central bank remains on course to cut interest rates in the near term, subject to any major shocks.

Gold prices held steady on Tuesday, as safe-haven demand amid ongoing tensions in the Middle East offset rising expectations of fewer U.S. rate cuts this year.

Federal Reserve Chair Jerome Powell told a U.S. Senate panel just over five weeks ago the Fed was "not far" from gaining confidence in inflation falling to the level needed to cut interest rates, but policymakers, investors and outside analysts have lost a bit of faith in that outlook considering a series of strong economic data.

Oil prices settled just lower Tuesday, as market participants weighed up potential new U.S. sanctions that could further curb the Tehran's oil exports just as geopolitical tensions continue to simmer as traders await Israel's response to the recent Iranian attack.

The threat of new sanctions on Iran comes after Tehran launched a large-scale drone and missile strike against Israel, raising the risk that could break out into a wider conflict in the Middle East. Israel is weighing up its response to the attack, which is expected to be measures to avoid a further escalation amid calls from its international allies calling for restraint.

U.S. crude stockpiles jumped more than expected last week, the API reported Tuesday, but gasoline inventories dropped pointing to an ongoing recovery in refinery activity amid growing fuel demand. The official government inventory report is due Wednesday.

U.S. stock index futures rose slightly on Tuesday, as Wall Street appeared to be steadying after fears of higher-for-longer interest rates sparked a series of steep losses.

Risk appetite remained fragile, especially as geopolitical tensions in the Middle East persisted, while top Federal Reserve officials also reiterated the central bank’s outlook on steady interest rates.

Fed Chair Jerome Powell signalled that recent signs of sticky inflation gave the central bank less confidence to cut interest rates early.

Some positive first-quarter earnings reports also helped support sentiment. Morgan Stanley rose 0.2% in aftermarket trade after clocking a stronger-than-expected quarterly profit. The earnings season is set to continue on Wednesday with Dutch chipmaking major ASML Holding,NV and healthcare giant Abbott Laboratories (NYSE:ABT) on tap.