The US dollar edged higher against a basket of major currencies on Monday ahead of the Federal Reserveâs monetary policy meeting that starts tomorrow. The greenback was able to maintain todayâs gain even after a report revealed disappointing existing home sales in June.
The Federal Open Market Committee will start a meeting that will last two days tomorrow to decide the US monetary policy. Bullish outlook by Federal Reserve officials for another interest rate hike during 2017 came under pressure following last weekâs lackluster economic data.
The monetary policy committee is widely expected to keep interest rates unchanged at a range between 1.00% and 1.25% tomorrow, according to the CME Group FedWatch tool. However, investors will be looking for hints on near future interest rate hikes, with the FedWatch tool pointing to a 45.0% probability of one being decided in December. Higher interest rates in the United States often support the greenback.
The dollar remained higher today, even after the National Association of Realtors stated in a report that existing home sales dropped 1.8% to 5.52 million units in June. The drop was bigger than a 1.0% decrease that analysts forecasted, following a 1.1% gain in May. National Association of Realtors chief economist Lawrence Yun attributed the decline to the smaller contract activity in the three months leading to June.
Until the Federal Open Market Committee releases its policy statement at 18:00 GMT on Wednesday, traders will await consumer confidence data tomorrow and new home sales the day after.
EUR/USD dropped to 1.1642 as of 14:35 GMT after touching 1.1633 at 13:35 GMT, the pairâs lowest level since Friday. EUR/USD began the week at 1.1662.
The Dollar Index, which tracks the performance of the US currency against a basket of other major peers, rose to 93.97 as of 14:31 GMT today from 93.85 yesterday.
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