FX round-up: Dismal US data weakens dollar

Date: Wednesday 25 Apr 2012

The dollar fell against major rivals on Tuesday as markets mulled disappointing US home and consumer confidence reports while many buyers sat at the sidelines as the Federal Reserve meeting got underway.

The euro spent a brief spell above $1.32 after strong demand for eurozone sovereign debt. Markets breathed a sigh of relief when yields on Spanish, Dutch and Italian fell following political turmoil at the start of the week.

The dollar index, which measures the US currency against a basket of six currencies, fetched 79.256 compared to 79.406 on Monday.

The dollar fell after the S&P/Case-Shiller 20-city composite declined more than expected in February. The greenback was further shunned after the Conference Board said its consumer-confidence index posted an unexpected decline in April.

Otherwise robust earnings from Apple increased risk appetite although activity remained retrained as the Federal Open Market Committee started its meeting. The Fed is expected to release a statement on Wednesday ahead of a press conference with Chairman Ben Bernanke. US quarterly growth and unemployment reports plus an outlook for interest-rates are also due.

Against the yen, the dollar changed hands at ¥81.28 from ¥81.15 the previous session. The Australian dollar skidded to a low of $1.0245 ahead of weaker than expected first quarter consumer price data. The data increased expectations that the central bank will cut interest rates next month.

Sterling bought $1.6137 compared to $1.6126 after UK public sector borrowing rose more than expected in March.



CJ

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