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Dollar rangebound as ISM report awaited

Published 09/04/2012, 08:31 AM
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Investing.com - The U.S. dollar trading in a tight range against the other major currencies on Tuesday, as expectations that the European Central Bank will soon act to tackle the debt crisis in the region underpinned market sentiment.

During European afternoon trade, the dollar pushed higher against the euro, with EUR/USD slipping 0.18% to 1.2569.

The euro continued to be supported by expectations that the ECB will announce details of measures to help stabilize the region’s sovereign debt markets after its upcoming policy setting meeting on Thursday.

The shared currency was little changed after ratings agency Moody’s lowered its outlook on the European Union's triple-A rating to negative, from stable.

Market participants were also anticipating next week’s Federal Reserve’s meeting, amid ongoing speculation over how close the U.S. central bank is to implementing another round of easing.

The greenback was fractionally higher against the pound, with GBP/USD inching down 0.07% to 1.5873.

In the U.K., concerns over the economic outlook were underlined after data showed that the construction sector contracted in August, as new orders fell at the sharpest rate since April 2009.

Markit said the U.K. construction purchasing managers' index fell to 49.0 in August from 50.9 in July, compared to expectations for a reading of 50.0.

Elsewhere, the greenback edged higher against the yen and the Swiss franc, with USD/JPY rising 0.16% to 78.38, and USD/CHF adding 0.18% to trade at 0.9554.

The Swissie shrugged off official data showing that Switzerland’s gross domestic product contracted by 0.1% in the second quarter, disappointing expectation for a 0.2% increase, as exports to the euro zone fell.

The Swiss economy still expanded at an annualized rate of 0.5% in the three months to June, compared with the same period last year.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD sliding 0.09% to 0.9848, AUD/USD dipping 0.01% to 1.0247 and NZD/USD down 0.37% to trade at 0.7946.

The Reserve Bank of Australia left its benchmark interest rate unchanged at 3.50% following its policy meeting on Tuesday and said current monetary policy remained appropriate, despite the moderating pace of global growth.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.16% to 81.30.

Later in the day, the Institute for Supply Management was to release a closely watched report on U.S. manufacturing activity.



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