The dollar is turning in a mixed performance against its major competitors Tuesday, but is overall little changed. Investors are awaiting Wednesday’s announcement from the Federal Reserve, after the central bank wraps up its 2-day policy meeting. Many analysts expecting the Fed to hint at a rate hike in September.
Meanwhile, U.S. economic data proved disappointing this morning. With home prices in major U.S. metropolitan areas unexpectedly showing a monthly decrease in May, Standard & Poor’s released a report on Tuesday showing that the annual rate of price growth during the month came in well below economist estimates.
The report said the S&P/Case-Shiller 20-City Composite Home Price Index rose 4.9 percent year-over-year in May, reflecting a modest slowdown from the upwardly revised 5.0 percent growth seen in April. Economists had expected the annual rate of price growth to accelerate to 5.6 percent from the 4.9 percent increase originally reported for the previous month.
Confidence among U.S. consumers has seen a substantial deterioration in the month of July, according to a report released by the Conference Board on Tuesday. The Conference Board said its consumer confidence index tumbled to 90.9 in July from a downwardly revised 99.8 in June.
Economists had expected the index to show a much more modest decrease to a reading of 99.6 from the 101.4 originally reported for the previous month.
The dollar rose to an early high of $1.1021 against the Euro Tuesday, but has since pulled back to around $1.1050.
A measure of future economic activity in Eurozone rose for the seventh successive month in June, signaling a modest recovery in economic activity through the balance of the year, the Conference Board said Monday. The Conference Board’s Leading Economic Index, or LEI, for the euro area increased 0.4 percent to 107.1, after a 0.3 percent rise in May. In April, the index rose by 0.5 percent.
French unemployment rose marginally to a fresh record in June, data released by the labor ministry revealed late Monday. The number of unemployed increased 1,300 in June from the prior month to 3.55 million. From a year ago, it rose by 4.7 percent.
Italy’s consumer confidence and business sentiment weakened more-than-expected in July, survey figures from ISTAT showed Tuesday. The consumer confidence index fell to 106.5 in July from 109.3 in the previous month, revised down from 109.5. Economists had expected the index to fall to 109.
The buck climbed to a high of $1.5522 against the pound sterling Tuesday morning, but has since dropped to around $1.56.
U.K. economic growth accelerated in the second quarter driven by an improvement in services output, which has again fueled debate over the timing of the interest rate hike. Gross domestic product grew 0.7 percent sequentially, in line with forecast, following a 0.4 percent rise in the first quarter, preliminary estimate from the Office for National Statistics showed Tuesday.
House price inflation in England and Wales reached its 3-month high in June, after easing in the previous nine months, data from the Land Registry showed Tuesday. The house price index rose 5.4 percent year-over-year in June, faster than previous month’s 4.6 percent climb. The latest rate of inflation was the highest since March, when prices grew the same 5.4 percent.
The greenback broke out to a high of Y123.792 against the Japanese Yen Tuesday, but has since retreated to around Y123.600
The material has been provided by InstaForex Company – www.instaforex.com