NEW YORK (Reuters) - The dollar dipped against the euro on Tuesday, a day before the Federal Reserve was expected to cut U.S. interest rates, while sterling dipped as Britain looked likely to go to election in December.
Investors will watch the conclusion of the U.S. central bank's two-day meeting, and the dollar may gain if the Fed indicates reluctance to cut rates more.
“We’re looking for a hawkish reaction, which would lean toward a stronger dollar,” said Mark McComick, North American head of FX strategy at TD Securities in Toronto.
“Given that markets are looking for the Fed to prop up the economy over the coming months, I think them signaling a little bit of a pause would kind of reinforce some consolidation in the dollar, especially against euro and sterling which have been driven by the Brexit euphoria,” he said.
Increasing optimism that Britain will reach a deal to avoid a disorderly exit from the European Union has supported the euro and sterling recently.
Still, the pound dipped on Tuesday in choppy trading after Prime Minister Boris Johnson won parliament's preliminary approval to hold Britain's first December election in almost a century in a bid to break the Brexit deadlock.
On Monday, the EU agreed to a three-month flexible delay to Britain's departure.
Sterling <GBP=> fell 0.04% against the dollar to $1.2857. It has risen from $1.2193 on Oct. 8, but is below a five-month high of $1.3012 reached on Oct. 21.
The Australian dollar climbed for a third straight session against the greenback on growing hopes for a U.S.-China trade agreement. Australia's economy is highly correlated to China's and on Monday, U.S. President Donald Trump said he expected to sign a significant part of the trade deal ahead of schedule.
The dollar index against a basket of six major currencies <.DXY> fell after data showed U.S. consumer confidence unexpectedly fell in October.
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Currency bid prices at 2:30PM (1830 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1109 $1.1098 +0.10% -3.13% +1.1118 +1.1074
Dollar/Yen JPY= 108.8800 108.9400 -0.06% -1.25% +109.0600 +108.7800
Euro/Yen EURJPY= 120.96 120.93 +0.02% -4.17% +121.0600 +120.5900
Dollar/Swiss CHF= 0.9933 0.9944 -0.11% +1.21% +0.9964 +0.9934
Sterling/Dollar GBP= 1.2857 1.2862 -0.04% +0.78% +1.2904 +1.2808
Dollar/Canadian CAD= 1.3088 1.3050 +0.29% -4.03% +1.3095 +1.3041
Australian/Doll AUD= 0.6861 0.6838 +0.34% -2.67% +0.6871 +0.6836
ar
Euro/Swiss EURCHF= 1.1038 1.1037 +0.01% -1.92% +1.1049 +1.1022
Euro/Sterling EURGBP= 0.8639 0.8628 +0.13% -3.84% +0.8650 +0.8609
NZ NZD= 0.6351 0.6347 +0.06% -5.45% +0.6375 +0.6340
Dollar/Dollar
Dollar/Norway NOK= 9.2364 9.2217 +0.16% +6.92% +9.3041 +9.2140
Euro/Norway EURNOK= 10.2629 10.2343 +0.28% +3.60% +10.3121 +10.2140
Dollar/Sweden SEK= 9.7060 9.7021 +0.14% +8.28% +9.7488 +9.7017
Euro/Sweden EURSEK= 10.7847 10.7700 +0.14% +5.07% +10.8045 +10.7706
(Editing by Marguerita Choy and David Gregorio)
