Forex – Dollar index holds steady as caution dominates-SapForex24

The dollar held steady against other major currencies on Tuesday, as the previous session’s downbeat U.S. data continued to weigh and as investors remained cautious ahead of the Federal Reserve’s policy decision on Wednesday.
EUR/USD rose 0.20% to 1.0920.

The dollar remained 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 held steady at 1.2894 after research group Markit said its manufacturing PMI rose 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 0.36% to 112.24, while USD/CHF shed 0.29% to 0.9934.
The Australian dollar was steady, with AUD/USD at 0.7529, while NZD/USD added 0.16% to 0.6918.

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 benchamark interest rate unchanged at 1.50% in a widely expected move.

Meanwhile, USD/CAD edged down 0.17% to trade at 1.3658, just off Monday’s three-week highs of 1.3699.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 98.91.

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