Investing.com - The dollar was at two month lows against a basket of other major currencies on Wednesday as investors looked ahead to the Federal Reserve statement later in the day, amid concerns that the economic recovery is losing momentum.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 96.22, holding just above Monday’s two month lows of 96.11.
The dollar weakened broadly on Tuesday after data showing that U.S. consumer confidence deteriorated last month fuelled speculation that the Fed will leave interest rates on hold at current record lows for longer.
The Conference Board reported that its consumer confidence index slumped to 95.2 in April, well below the forecast of 102.5 and down from 101.4 in March.
Inflation rate expectations were the lowest since February 2007.
The report said the deterioration in confidence was due to the recent lackluster performance of the labor market and apprehension about the short-term outlook.
The report came as investors were looking ahead the Fed’s rate statement for further indications on the timing of a first rate hike. Recent disappointing reports on employment, retail sales and industrial production have prompted investors to push back expectations for an initial rate hike to later in the year from midyear.
EUR/USD was at 1.0970, close to Tuesday’s three-week highs of 1.0990.
Demand for the euro continued to be underpinned amid optimism that Greece is moving closer to reaching an agreement with its creditors on a package of economic reforms for bailout funds.
Meanwhile, USD/JPY was steady near one-week lows at 118.84.