The greenback fell on Tuesday after weak US consumer confidence data and decline in US home prices. The S&P/Case-Shiller 20-city composite index declined in February while Conference Board also reported the less than expected consumer confidence data. Investors were uncertain due to weak US economic data and were concerned that how US Federal Reserve would react in its two day meeting.
Analysts think that the purpose of Federal Reserve’s meeting is to deliver a clear message regarding their monetary policy plans but instead it will confuse investors. Investors are also mixed about the US Fed’s plans on the implementation of the third round of quantitative easing.
The dollar index DXY which tracks the greenback’s performance against its six major rival currencies fell to 79.256 on Tuesday as compared to 70.406 on Monday’s late trading hours.
The euro gained to 1.3187 against the US dollar on Tuesday as compared to 1.3149 on Monday’s North American trading session. The single currency mainly gained in reaction to the greenback’s weakness and currency strategist think the political risks in the euro zone still prevail.
Among other currencies, the British Pound gained to 1.6137 versus the US dollar on Tuesday as compared to 1.6127 on late Monday. The Pound Sterling gained on the increase in public sector borrowing for the month of March in UK.
Against the Japanese yen, the greenback gained to 81.28 on Tuesday as compared to 81.14 on Monday. The Australian dollar fell to 1.0245 against the greenback on as compared to 1.0322 in reaction to weaker than expected consumer price data.
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