Investing.com – The dollar traded flat against a basket of global currencies on Tuesday, as the Fed’s two-day rate policy meeting overshadowed economic data showing an improvement in consumer optimism about the strength of the U.S. economy.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.01% to 93.83
The dollar eased from highs, as investors looked ahead to the Federal Reserve’s rate decision due Wednesday, expected to provide fresh insight into the U.S. central bank’s thinking on monetary tightening.
Analysts expect the Federal Reserve to keep its benchmark rate unchanged on Wednesday.
Ahead of the Fed rate decision, the dollar struggled to capitalize on better-than-expected consumer confidence data for July, easing fears about a possible slowdown in the U.S. economy.
The Consumer Confidence Index rose in July to 121.1 to a 16-year high, despite expectations for a drop, The Conference Board announced Tuesday.
Economists had forecast the major indicator of consumer optimism to decline to 116.5 in July.
Meanwhile, GBP/USD eased to $1.3036, up 0.06%, after rallying to session highs of $1.3084 on the back of a tweet from President Donald Trump outlining that his administration is working on “major trade deal” with the United Kingdom.
A speech by Bank of England MPC member Andy Haldane later during the session is expected to provide further insight on whether the central bank continues to support the idea of tapering its ultra-accommodative monetary policy measures later this year.
EUR/USD traded roughly flat at $1.1654, up 0.09%, while EUR/GBP added 0.01% to 0.8938.
USD/CAD traded at $1.2502, down 0.02%, after a surge in oil prices supported a move higher in the oil-sensitive loonie while USD/JPY rose to Y111.62, up 0.47%.