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Dollar broadly lower ahead of Fed

Published 05/01/2013, 04:20 AM
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Investing.com - The dollar was broadly lower against the other major currencies on Wednesday ahead of the outcome of the Federal Reserve’s latest policy meeting later in the trading day.

During European morning trade, the dollar was trading near two-week lows against the euro, with EUR/USD rising 0.12% to 1.3179.

The dollar remained under pressure after recent soft U.S. economic data saw investors trim back expectations for an earlier-than-expected end to the Fed’s asset purchase program.

Data on Tuesday showed that the Chicago purchasing managers’ index dropped 49.0 in April from 52.4 in March, the lowest level since September 2009.

In the euro zone, speculation over a rate cut by the European Central Bank on Thursday intensified after data on Tuesday showed that euro zone unemployment rose to a record in March, while inflation fell more-than-expected in April.

Recent comments by ECB officials have indicated that the bank would consider cutting rates if economic data continued to deteriorate.

The dollar was steady near two-and-a-half month lows against the pound, with GBP/USD edging up 0.05% to 1.5538.

The dollar edged higher against the yen, with USD/JPY easing up 0.14% to 97.53.

The dollar was fractionally higher against the Swiss franc, with USD/CHF edging up 0.07% to 0.9300.

The greenback pushed higher against its Australian, New Zealand and Canadian counterparts, with AUD/USD sliding 0.17% to 1.0353, NZD/USD dipping 0.05% to 0.8560 and USD/CAD inching down 0.08% to 1.0062.

The Australian dollar hit session lows after official data showed that China’s manufacturing purchasing managers' index ticked down to 50.6 from an 11-month high of 50.9 in March, as new export orders fell.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.04% to 81.72.

Trade volumes looked set to remain thin on Wednesday, with many bourses in Europe shut for the Labor Day holiday.

Later Wednesday, the U.S. was to release data on ADP nonfarm payrolls, while the Institute of Supply Management was to publish its report on manufacturing activity.




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