The USD hit 13-month lows against the euro on Tuesday and remained weaker against the yen as investors looked ahead to a number of significant U.S. economic events later in the week. During U.S. morning trade, the dollar was lower against the yen, with USD/JPY down 0.20% to 90.65. Investors remained cautious ahead of the outcome of the Federal Reserve’s policy meeting and U.S. data on fourth quarter growth on Wednesday, as well as Friday’s U.S. nonfarm payrolls report. The USD hit 13-month lows against the euro, with EUR/USD rising 0.18% to 1.3479. Demand for the single currency was underpinned by optimism. Data showed that German consumer confidence is set to rebound in February, adding to signs of a recovery in the bloc’s largest economy. The forward looking Gfk index of consumer confidence ticked up to 5.8 for February, from an upwardly revised 5.7 in January. The greenback pulled away from five-month highs against the pound, with GBP/USD rising 0.40% to 1.5755. Sterling’s gains looked set to remain limited as concerns over the U.K. economic outlook and prospects for more easing by the Bank of England weighed. The greenback was weaker against the Swiss franc, with USD/CHF down 0.52% to 0.9214. The greenback was broadly lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD sliding 0.18% to 1.0044, AUD/USD up 0.43% to 1.0461 and NZD/USD rising 0.42% to 0.8375. The Australian dollar found support after the National Bank of Australia said that its index of business confidence improved to 3 in December from a reading of minus 9 the previous month. In New Zealand, official data showed that the trade surplus widened to NZD486 million in December, well above forecasts for a surplus of NZD110 million. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.31% to 79.65. In the U.S., data showed that consumer confidence dropped to a 14-month low in January. The Conference Board said its index of U.S. consumer confidence fell to 58.6 in January from a reading of 66.7, compared to expectations for a decline to 64.0. A separate report showed that the S&P/Case-Shiller U.S. home price index rose at an annualized rate of 5.5% in November from a year earlier, increasing for the eighth consecutive month.
EasyForexNews Research Team