The U.S. dollar weakened against the other major currencies in the Asian session on Tuesday, as traders remain cautious after disappointing U.S. new home sales in September, which revived concerns about the economy ahead of the Federal Open Market Committee’s two-day meeting beginning later today.
The Commerce Department released a report on Monday showing that the U.S. new home sales tumbled 11.5 percent to an annual rate of 468,000 in September from the revised August rate of 529,000. Economists had expected new home sales to edge down just 0.5 percent to a rate of 549,000 from the 552,000 originally reported for the previous month.
The Fed is widely expected to leave interest rates unchanged, but investors will be keeping a close eye on the accompanying statement for hints as to whether the U.S. central bank is still on track to raise rates at the end of the year.
Meanwhile, some economists find a probability of the Fed raising interest rates at its meeting in December.
Monday, the U.S. dollar showed mixed performance against its major rivals. While the U.S. dollar rose against the pound, the Swiss franc and against the yen, it held steady against the euro.
In the Asian trading, the U.S. dollar fell to 4-day lows of 1.1069 against the euro and 120.48 against the yen, from yesterday’s closing quotes of 1.1057 and 121.08, respectively. If the greenback extends its downtrend, it is likely to find support around 1.14 against the euro and 117.00 against the yen.
Against the pound and the Swiss franc, the greenback edged down to 1.5359 and 0.9809 from yesterday’s closing quotes of 1.5350 and 0.9835, respectively. The greenback may test support near 1.55 against the pound and 0.95 against the franc.
Meanwhile, the U.S. dollar rose to 0.7228 against the Australian dollar and 1.3176 against the Canadian dollar, from yesterday’s closing quotes of 0.7245 and 1.3152, respectively. The greenback is likely to find resistance around 0.70 against the aussie and 1.34 against the loonie.
Against the NZ dollar, greenback advanced to 0.6738 from yesterday’s closing value of 0.6785 and held steady thereafter.
Looking ahead, Swiss UBS consumption indicator for September, Eurozone M3 money supply data for September, the first estimate of U.K. GDP data for the third quarter and U.K. index of services for August are due later in the day.
In the New York session, U.S. durable goods orders for September, S&P/Case-Shiller U.S. home price index for August and Markit’s preliminary U.S service sector PMI report, U.S. consumer confidence index and U.S. Richmond manufacturing index, all for October, are slated for release.
At 1:00 pm ET, Bank of Canada Deputy Governor Tim Lane will give a speech in Halifax on the topic “Inflation Targeting – A Matter of Time.”
The material has been provided by InstaForex Company – www.instaforex.com