Forex - Euro off lows as U.S. consumer confidence deteriorates

© Reuters. Euro pares losses against dollar after U.S. consumer confidence data, Fed ahead

Investing.com - The euro pulled back from session lows against the dollar on Tuesday as data showing that U.S. consumer confidence deteriorated this month tempered expectations for higher interest rates.

EUR/USD was last at 1.1056, off 0.28% for the day, from lows of 1.1022 ahead of the report.

The Conference Board, a market research group, said its index of consumer confidence fell to 90.9 this month from a downwardly revised 99.8 in June. Economists had forecast a reading of 100.0.

A less optimistic outlook for the labor market, as well as uncertainty and volatility in financial markets prompted by the situation in Greece and China sapped investor sentiment, the report said.

Other reports earlier Tuesday showed that U.S. house price growth stalled in May, while activity in the service sector picked up this month.

Demand for the dollar continued to be underpinned ahead of the start of the Federal Reserve’s two day policy setting meeting later in the day.

Investors were looking ahead to Wednesday’s Fed statement to see if policymakers would give any indication on the timing of an initial rate hike.

Fed Chair Janet Yellen has said the central bank could raise rates as soon as September if the economy continues to improve as expected.

The U.S. was to release figures on second quarter growth on Thursday, which were expected to show that the economy rebounded following a contraction in the first quarter following an unusually harsh winter.
The dollar eased against the yen, with USD/JPY last at 123.60, holding below session highs of 123.8.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.28% to 96.89, remaining above Monday’s two week lows of 96.28.