The dollar extended losses against the euro and pound on Tuesday after disappointing US economic data helped cement expectations the Federal Reserve will leave interest rates unchanged the next day.
US 100 dollar notes are seen at a bank. (REUTERS/Lee Jae-Won/Files)
NEW YORK: The dollar extended losses against the euro and
pound on Tuesday (Apr 26) after disappointing US economic data helped
cement expectations the Federal Reserve will leave interest rates
unchanged the next day.
US durable goods orders rose much less than expected in March, adding
further evidence of weakness in the manufacturing sector. Consumer
confidence in April unexpectedly fell, according to the closely watched
Conference Board survey.
The data came as the Federal Reserve opened a two-day
monetary policy meeting. All eyes in the market were focused on the
Fed's post-meeting statement, due at 1800 GMT on Wednesday.
"While no change in rates is expected from the Fed tomorrow,
its policy statement could help shed light on the outlook for borrowing
costs over the months ahead," said Omer Esiner Commonwealth Foreign
Exchange.
"In particular, investors want to see if the Fed
acknowledges any improvement in domestic or international economic
conditions, which could make a quarter-point rate hike in June more
likely."
The dollar, which had weakened Monday, slipped 0.3 per cent
to US$1.1298 per euro. The greenback, meanwhile, edged higher against
the yen.
"With the US central bank likely on hold for the time being,
and absent any strong signals with respect to the timing of the next
interest rate increase, we continue to expect only moderate US dollar
performance in the near term," said Eric Viloria, currency strategist at
Wells Fargo Securities.
- AFP/de
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