Dollar almost unchanged against other majors ahead of Fed decision

The dollar held steady against other major currencies on Tuesday, as investors remained cautious ahead of the Federal Reserve’s policy decision due on Wednesday.

EUR/USD was steady at 1.0892.

The dollar came under pressure after the Institute of Supply Management said on Monday that its manufacturing purchasing managers’ index fell to 54.8 in April from 57.2 the previous month, compared to expectations for a downtick to 56.5.

A separate report showed that U.S. personal spending was flat in March, confounding expectations for a 0.2% rise and after a 0.1% gain.

However, U.S. Treasury Secretary Steven Mnuchin said on Monday that economic growth of 3% is achievable in the next two years as the Trump administration is planning to dramatically cut taxes.

Market participants were also eyeing the Federal Reserve’s two-day policy meeting this week. While the central bank is widely expected to hold interest rates, investors were eyeing hints on the pace of future rate hikes.

GBP/USD rose 0.31% to 1.2925 after research group Markit said its manufacturing PMIrose to 57.3 in April from 54.2 the previous month. It was the highest reading since July 2014.

Analysts had expected the index to hit 54.0 last month

USD/JPY gained 0.28% to 112.15, while USD/CHF shed 0.21% to 0.9941.

The Australian dollar remained moderately lower, with AUD/USD down 0.08% at 0.7520, while NZD/USD rose 0.20% to 0.6921.

Earlier Tuesday, data showed that China’s Caixin manufacturing PMI slipped to 50.3 in April from 51.2 the previous month, compared to expectations for an unchanged reading.

At the same time, the Reserve Bank of Australia left its benchmark interest rate unchanged at 1.50% in a widely expected move.

Meanwhile, USD/CAD gained 0.32% to trade at a fresh 15-month high of 1.3724.

 

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