EUR/USD
The euro dipped to 8-month lows against the dollar on Tuesday after a cheery U.S. consumer confidence report sent investors betting the Federal Reserve will deliver an upbeat assessment of the economy after its policy meeting ends on Wednesday. The dollar firmed after the Conference Board reported that its consumer confidence index rose to 90.9 in July from an upwardly revised 86.4 in June. It was the highest reading since October 2007, defying consensus forecasts for a decline to 85.3. The data sent investors betting that the Federal Reserve on Wednesday will make fresh cuts to its monthly bond-buying program and deliver and upbeat take on the U.S. economy.
GBP/USD
The pound moved lower against the dollar on Tuesday after an upbeat U.S. consumer confidence report sparked expectations that the Federal Reserve will conclude a two-day policy meeting deciding the economy is on the mend and may be in need of reining in some time next year. The dollar firmed after the Conference Board reported that its consumer confidence index rose to 90.9 in July from an upwardly revised 86.4 in June. It was the highest reading since October 2007, defying consensus forecasts for a decline to 85.3. The data sent investors betting that the Federal Reserve on Wednesday will make fresh cuts to its monthly bond-buying program and deliver and upbeat take on the U.S. economy, possibly alluding to a need to hike interest rates some time in 2015.
USD/JPY
The Japanese yen was slightly stronger in Asia on Wednesday with eyes on industrial production in Japan. Overnight, the dollar strengthened against most major currencies after a widely-watched gauge of U.S. consumer confidence beat expectations. The Conference Board reported that its consumer confidence index rose to 90.9 in July from an upwardly revised 86.4 in June. It was the highest reading since October 2007, defying consensus forecasts for a decline to 85.3. The data sent investors betting that the Federal Reserve on Wednesday will make fresh cuts to its monthly bond-buying program and deliver an upbeat take on the U.S. economy. Fed asset purchases which have stimulated the economy off and on since the 2008 crisis coupled with low interest rates tend to weaken the dollar by sending investors to stocks, while talk of an end to such loose policies often bolsters the U.S. currency.
USD/CAD
The dollar rose to one-month highs against the Canadian dollar on Tuesday as investors positioned ahead of a series of key economic indicators later in the week. Demand for the dollar continued to be underpinned ahead of preliminary data on U.S. second-quarter growth and the Federal Reserve’s latest rate statement, both due on Wednesday. Investors were also awaiting the July employment report on Friday. Earlier this month Fed Chair Janet Yellen said that rates could rise sooner if the recovery in the labor market continued. Canada was to release the May report on gross domestic product on Thursday. The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.16% to 81.24, the highest since early June.
