Dollar tumbles to 2-month low ahead of Fed meeting

Currencies Direct May 1st 2013 - < 1 minute read

The US dollar slid to two-month lows against a basket of
currencies on Tuesday (April 30th) as investors saw no end in
sight for the Federal Reserve’s loose monetary any time soon.

Sterling finished higher for a fifth straight day, with the
GBP/USD
exchange rate
closing up at 1.5535.

The euro was also up at 1.3187, a two-week high, while the
dollar index, which measures the greenback’s value against a basket
of six major currencies, hit its lowest since the end of February
at 81.598.

Business activity in the US Midwest unexpectedly shrank in April
to its lowest level since September 2009, adding to fears of a
slowdown in the recovery.

Chicago’s purchasing managers’ index fell to 49 last month from
a reading of 52.4 in March. Pressure has been on the dollar all
week after below-forecast first quarter GDP growth was announced
last Friday.

Investors are keeping a close watch on the results of the Fed’s
two-day policy meeting. A statement later on Wednesday is expected
to sound dovish notes in response to the recent weak economic
data.

Meanwhile the European Central Bank will meet on Thursday, with
many forecasting a 0.25 basis point cut in interest rates to 0.5
per cent.

The euro has risen by 2.7 per cent against the dollar in April,
its first monthly gain since January.

Written by
Currencies Direct

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