Investors await U.S. economic data, digest German ZEW report
By Polya Lesova and Sarah Turner, MarketWatch
LONDON (MarketWatch) — The U.S. dollar dropped against most of its major rivals on Tuesday ahead of a policy decision from the Federal Reserve’s interest-rate setting committee.
The dollar index DXY -0.08% , which measures the performance of the greenback against a basket of six currencies, fell to 79.369 from 79.533 in late North American trading on Monday.
Investors are awaiting U.S. data on November retail sales due at 8:30 a.m. Eastern time. Also, reports on October business inventories as well as job openings and labor turnover will be released at 10 a.m. Eastern.
The U.S. Federal Open Market Committee will issue its statement on monetary policy at 2:15 p.m. Eastern. It’s expected to keep rates on hold.
“We do not look for any big surprise from either of these, but at least the Fed may sound a little more positive in light of firmer data over recent weeks,” said Credit Agricole strategists.
The dollar index gained on Monday but the euro EURUSD +0.01% fell to its lowest level in two weeks — $1.3177 — before recovering slightly to $1.3188 by late trading.
The euro gained to $1.3213 on Tuesday, as traders digested data showing that the ZEW indicator of economic sentiment for Germany rose by 1.4 points to minus-53.8 in December.
“There is still some way to go before a turning point in the euro crisis is reached. One reason being the apparent lack of firepower to support sovereign bonds, particularly from the European Central Bank,” the Credit Agricole strategists said.
The British pound GBPUSD -0.01% traded at $1.5603, compared to $1.5584 in late trading Monday. The dollar USDJPY -0.10% bought 77.75 yen, compared with ÂĄ77.96.
Polya Lesova is chief of MarketWatch’s London bureau.
Sarah Turner is MarketWatch's bureau chief in Sydney.
