The U.S. dollar declined against its major rivals in early New York deals on Monday, ahead of a key policy meeting of the U.S. Federal Reserve this week, which may offer hints on interest rate hike.
The Fed will start a 2-day policy meeting on Tuesday. It will release latest economic forecast and the projected interest rate path of the 17 officials alongside policy statement on Wednesday. That will be followed by Fed chair Janet Yellen’s press conference at 2:30 pm ET.
Investors are anxious to see whether the Fed remove the word “patient” from the statement, which would leave them the option of raising the rate as early as June.
With weak wage growth and stubbornly low inflation, investors are doubtful over whether the Fed members will rush for an early hike considering labour market recovery alone.
The greenback was also weighed by slower-than-expected industrial output growth in February and unexpected fall in NAHB housing market index in March.
Data released by the Federal Reserve showed that U.S. industrial production inched up by 0.1 percent in February, slower than the 0.3 percent increase expected by economists. The Fed also revised down its January reading to 0.3 percent.
Homebuilder confidence in the U.S. has unexpectedly deteriorated in the month of March, according to a report released by the National Association of Home Builders.
The report said the NAHB/Wells Fargo Housing Market Index fell to 53 in March from 55 in February. The drop surprised economists, who had expected the index to inch up to 56.
With the unexpected decrease, the housing market index fell to its lowest level since hitting a matching reading last July.
The greenback that closed yesterday’s deals at 1.4726 against the pound edged down to 1.4820. The next possible support for the greenback may be located around the 1.50 mark.
The average asking price for a house in the United Kingdom was up 1.0 percent on month in March, data from property tracking website Rightmove showed.
That missed forecasts for an increase of 1.9 percent, and it was down from the 2.1 percent gain in February.
The greenback reversed from an early high of 1.0469 versus the euro and fell to 1.0589. Continuation of the greenback’s downtrend is likely to lead it to a support around the 1.08 region.
The greenback fell to a 4-day low of 121.08 against the yen, compared to 121.41 hit at last week’s close. Further weakness may push the dollar down to a support near the 120.00 area.
After being steady against the franc throughout previous deals, the greenback declined to 1.0022. At last week’s close, the pair was valued at 1.0044. Next key support for the greenback is seen around the 0.99 zone.
Swiss retail sales declined in January after recovering in the prior month, provisional results from the Federal Statistical Office showed.
Excluding fuel, retail sales dropped 0.3 percent from last year, reversing a 1.9 percent rise in December.
Reversing from early highs of 0.7613 against the aussie and 0.7314 against the kiwi, the greenback slipped to 0.7679 and 0.7404, respectively. The greenback remained lower against the loonie, trading at 1.2779. The greenback is likely to find support around 0.78 against the aussie, 0.75 against the kiwi and 1.26 against the loonie.
Looking ahead, the European Central President Mario Draghi is due to speak at the SZ Finance Day 2015 “The Future of the Finance Industry – Between Growth and Regulation” summit, in Frankfurt at 2:45 pm ET.
The material has been provided by InstaForex Company – www.instaforex.com