Investing.com - The dollar held steady against the other major currencies on Tuesday, as investors turned their attention to the Federal Reserve's upcoming policy meeting after downbeat housing sector data on Monday dampened demand for the greenback.
The dollar was lower against the yen, with USD/JPY sliding 0.55% to 120.42.
Demand for the greenback remained under pressure after data on Monday showed that U.S. new home sales dropped 11.5% last month to 468.000 units from a revised total of 529.000 units in August. Analysts had expected new home sales to slip 0.4% to 550.000 in September.
The disappointing report added to speculation that the Federal Reserve will hold off on raising interest rates until well into 2016.
Investors were looking ahead to Wednesday’s monetary policy announcement by the Fed for fresh indications on the timing of an initial rate hike.
EUR/USD was steady at 1.1054.
Sentiment on the single currency remained fragile after European Central Bank President Mario Draghi signaled that further monetary easing is likely later this year.
Elsewhere, the dollar was steady against the pound and the Swiss franc, with GBP/USD at 1.5345 and with USD/CHF at 0.9841.
Sterling weakened after the U.K. Office for National Statistics said gross domestic product expanded by 0.5% in the third quarter, missing forecasts for growth of 0.6%. The U.K.’s economy grew by 0.7% in the three months to June.
Year-over-year, U.K. economic growth expanded 2.3% in the third quarter, below expectations for 2.4%. The U.K. economy grew at an annualized rate of 2.4% in the second quarter.
The Australian and New Zealand dollars were little changed, with AUD/USD at 0.7247 and with NZD/USD at 0.6785.
Meanwhile, USD/CAD rose 0.29% to trade at 1.3192.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 96.86, not very far from Friday's two-month highs of 97.30.