1 month ago
Forex

Dollar Flat s Consumer Confidence Cools Ahead of Fed Decision

Investing.com – The U.S. dollar was flat against a basket of major currencies on Tuesday after consumer confidence dropped to

Investing.com – The U.S. dollar was flat against a basket of major currencies on Tuesday after consumer confidence dropped to an 18-month low following the government shutdown. Traders also were waiting for the Federal Reserve's interest rate decision due Wednesday.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.05% to 95.79.

The Conference Board’s consumer confidence gauge fell to 120.2 in January from 126.6 last month, missing economists forecast for a reading of 124.7.

Analysts said the fall in consumer confidence does not bode well for consumer spending, one of the main drivers behind U.S. economic growth.

Wells Fargo said consumer confidence was weighed down by a volatile stock market and and the government shutdown. But the Conference Board believes confidence has rebounded after past shutdowns, and the decline may prove temporary.

The weaker consumer sentiment data comes as the Federal Reserve gets its two-day meeting underway. The central bank is expected to leave its key federal funds rate target unchanged at 2.25% to 2.5% in a decision due Wednesday.

Elsewhere, GBP/USD fell 0.14% to $1.3141 as traders awaited the results of votes on amendments to Prime Minister Teresa May's Brexit withdrawal deal.

The amendments focused on alternative arrangements to solve the problem of a hard border between the Northern Ireland and the Republic of Ireland and how to avoid the U.K. leaving the EU without a trade deal.

EUR/USD fell 0.04% to $1.1428.

USD/CAD tacked on 0.06% to about $1.372 as rising oil prices firmed up the loonie and limited gains in the pair.

USD/JPY was flat at Y109.37 as risk sentiment remained challenged amid ongoing concerns about slowing global growth.