The U.S. dollar weakened against most major rivals in European deals on Wednesday, before the Federal Reserve’s decision on interest rates, with investors looking for any hints about its monetary policy outlook.
The Fed’s rate decision comes out at 2 pm ET.
While no one expects the Fed to raise rates, investors eye the accompanying statement for clues on a possible interest rate increase later this year.
Meanwhile, the U.S. bond prices slipped, pushing up treasury yields. The yields on 30-year bond rose 2.86 percent, with those of 10-year note was up by 2.03 percent. Yields move inversely to bond prices.
In economic news, the US trade deficit in goods narrowed to $58.6 billion in September from August’s $66.6 billion shortfall. Economists had been expecting a deficit of $64.30 billion
In the Asian session, the greenback was trading in higher against most major rivals amid its safe-haven appeal, as Asian shares declined ahead of the Fed outcome.
In European deals, the greenback eased off from early high against the Japanese yen, with the pair trading steadily around 120.30. This may be compared to an early high of 120.55. The next possible support for the greenback-yen pair is seen around the 119.00 zone.
The greenback dropped to 0.9828 against the Swiss franc, after having advanced to a 2-1/2-month high of 0.9874 at 8:00 pm ET. The greenback is seen finding support around the 0.975 region.
The greenback fell to a 5-day low of 1.1090 against the euro, lower by 0.60 percent from an early 2-day high of 1.1025. If the greenback continues slide, it may possibly find support around the 1.116 level.
The results of the monthly survey by the GfK showed that German consumer confidence is set to weaken for a third straight month in November owing to deterioration in households’ economic expectations and willingness to make big purchases.
The forward-looking GfK consumer confidence index for November dropped to 9.4 from 9.6 in October. The score was in line with economists’ expectations. The latest reading was the lowest since February.
On the flip side, the greenback firmed to a 2-week high of 1.5276 against the pound, compared to yesterday’s closing value of 1.5300. The greenback is likely to find resistance around the 1.51 region.
The material has been provided by InstaForex Company – www.instaforex.com