The dollar is rising against the Euro and the British pound Tuesday afternoon, but is losing ground against the Japanese Yen. Investors appear reluctant to make moved ahead of the Federal Reserve announcement Wednesday afternoon. The Fed is widely expected to hold off on raising interest rates, but traders will be paying close attention to any signals regarding a rate hike in December.
Meanwhile, U.S. economic data was largely weaker than anticipated this morning. Partly reflecting another notable decrease in orders for transportation equipment, the Commerce Department released a report on Tuesday showing a continued decrease in new orders for U.S. manufactured durable goods in September.
The report said durable goods orders slid by 1.2 percent in September following a revised 3.0 percent decrease in August. Economists had expected durable goods orders to fall by about 1.0 percent compared to the 2.3 percent drop that had been reported for the previous month.
Home price growth in major U.S. metropolitan areas saw a slight acceleration in the annual pace of growth in August, according to a report released by Standard & Poor’s on Tuesday. The report said the S&P/Case-Shiller 20-City Composite Home Price Index climbed 5.1 percent year-over-year in August compared to the revised 4.9 percent annual growth seen in July. The acceleration matched economist estimates.
After reporting an unexpected improvement in U.S. consumer confidence in the previous month, the Conference Board released a report on Tuesday showing that confidence pulled back rather sharply in the month of October.
The Conference Board said its consumer confidence index tumbled to 97.6 in October from a downwardly revised 102.6 in September. Economists had been expecting the index to dip to 102.5 from the 103.0 originally reported for the previous month.
The dollar hit an early low of $1.1078 against the Euro Tuesday, but has since bounced back to around $1.1040.
Eurozone money supply growth held steady in September, figures from the European Central Bank showed Tuesday. M3, the broad measure of money supply, rose a seasonally adjusted 4.9 percent year-over-year in September, the same rate of increase as in the previous month, revised from a 4.8 percent growth. In July, money supply had risen 5.3 percent.
The buck has climbed to nearly a 2-week high of $1.53 against the pound sterling Tuesday afternoon, from around $1.5350 this morning.
British economic growth eased more-than-expected in the third quarter, dragged by a sharp drop in construction, suggesting that the fast-paced recovery may be cooling. Yet, the recent slowing is unlikely to shift the Bank of England’s stance that interest rates need to be raised earlier than expected.
Gross domestic product rose 0.5 percent from the second quarter, when it grew 0.7 percent, preliminary estimates from the Office for National Statistics showed Tuesday. Economists were looking for 0.6 percent economic expansion.
The greenback has extended yesterday’s losses against the Japanese Yen, falling to around Y120.295, from last Friday’s high of Y121.475.
The material has been provided by InstaForex Company – www.instaforex.com