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Dollar higher ahead of U.S. data, Fed meeting

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Investing.com - " The dollar pushed higher against the other major currencies on Tuesday but gains looked likely to remain limited as investors remained cautious ahead of the Federal Reserve's latest policy meeting on Wednesday.

During European late morning trade, the euro slipped lower against the dollar, moving off last Friday's 23-month highs, with EUR/USD down 0.21% to 1.3756.

The dollar found support on the view that markets have already priced in expectations that the Fed will make no changes to its USD85 billion-a-month asset purchase program on Wednesday.

Data released on Monday showed that U.S. industrial production rose 0.6% in September, coming in above expectations for a 0.4% rise.

However, a separate report showed that U.S. pending home sales fell 5.6% in September, down for the fourth consecutive month.

The data did little to shift expectations that the Fed will maintain its stimulus program well into the first quarter of next year, in order to safeguard the economic recovery following the recent 16-day government shutdown.

The U.S. was to release data on retail sales, producer price inflation and consumer confidence later in the trading day.

The dollar gained ground against the yen, with USD/JPY rising 0.25% to 97.92.

The dollar was also higher against the pound, with GBP/USD down 0.41% to 1.6075.

In the U.K., data on Tuesday showed that mortgage approvals rose to the highest level since February 2008 in September, adding to signs of a recovery in the housing market.

The dollar pulled further away from last week's 20-month lows against the traditional safe haven Swiss franc, with USD/CHF up 0.28% to 0.8982.

The greenback rose to fresh session highs against its Australian and New Zealand counterparts, with AUD/USD dropping 0.87% to 0.9490 and NZD/USD down 0.65% to 0.8247.

Australia's dollar weakened after Reserve Bank of Australia Governor Glenn Stevens said Tuesday it was likely the Australian dollar would fall materially in the future as exchange rate levels are not supported by Australia's relative levels of costs and productivity.

The greenback was slightly lower against the Canadian dollar, with USD/CAD sliding 0.13% to 1.0430.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.20% to 79.56.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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