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Forex - Dollar mixed vs. rivals with FOMC decision in focus

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Forexpros - The U.S. dollar was mixed against most of its major counterparts on Tuesday, as investors awaited a Federal Reserve statement on monetary policy, which could provide hints regarding further easing measures.

With financial markets in turmoil, expectations grew that the central bank would introduce further easing to calm investors and stimulate growth in the world's largest economy after it completed a USD600 billion Treasury bond-buying program known as Quantitative Easing 2 on June 30.

During U.S. morning trade, the greenback was down against the euro, with EUR/USD gaining 0.26% to hit 1.4216.

Earlier in the day, government data showed that Germany's trade surplus narrowed in line with expectations to EUR11.5 billion in June, down from May's surplus of EUR12.9 billion.

But the greenback was higher against the pound, with GBP/USD shedding 0.67% to hit 1.6209.

The U.K. Office for National Statistics said earlier that manufacturing production fell by 0.4% in June, confounding expectations for a 0.2% gain. A separate report showed that the country's goods trade deficit widened unexpectedly to GBP8.9 billion in June from GBP8.5 billion in May.

Meanwhile, the greenback was down sharply against the safe haven yen and Swiss franc, with USD/JPY falling 0.62% to hit 77.29 and USD/CHF plunging 1.96% to hit 0.7404, after falling to a record low of 0.7360 earlier.

The yen approached its highest level versus the greenback since Tokyo's intervention last week, prompting Japanese Finance Minister Yoshihiko Noda to say that he was closely watching market movements "with a sense of urgency".

Meanwhile, the Swiss National Bank declined to comment on reports that it added liquidity to the foreign exchange market though currency swaps, in an effort to stem the franc's sharp gains.

Elsewhere, the greenback was up against the Australian and New Zealand dollars but down against its Canadian counterpart, with AUD/USD slumping 0.28% to hit 1.0161, NZD/USD dipping 0.25% to hit 0.8188, while USD/CAD shed 0.2% to hit 0.9925

A report from China's National Bureau of Statistics showed that consumer price inflation rose by a seasonally adjusted 6.5% in July, the fastest pace in three years.

Also Tuesday, the Canada Mortgage and Housing Corporation said that the seasonally adjusted annual rate of housing starts rose to 205,000 units in July, above expectations for a gain of 195,000 units.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.15% to hit 74.82.

Earlier Tuesday, government data showed that U.S. non-farm productivity declined 0.3% in the second quarter, while unit labor costs rose 2.2%, broadly in line with expectations.

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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.


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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