The U.S. dollar was under pressure in Tuesday trading, looking at another down day to its recent run, ahead of the Federal Reserve’s monetary policy update on Wednesday.
The ICE U.S. Dollar Index DXY, -0.12% was down 0.2% at 96.368. The gauge has fallen seven out of the past eight sessions, according to FactSet data.
The economic calendar was light, with data showing U.S. factory orders rose 0.1% in January, versus a consensus forecast for a rise of 0.4% in a MarketWatch survey of economists. The Fed’s monetary policy meeting begins Tuesday, culminating in Wednesday’s interest-rate decision. Investors will be watching out for forward guidance and what many analysts expect to be further dollar-negative dovishness on the part of the central bank.
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The British pound GBPUSD, +0.0151% retraced some of Monday’s losses, last trading at $1.3270, compared with $1.3252, helped higher by better-than-expected economic data.
The U.K.’s unemployment rate dropped to 3.9%, and monthly average earnings held steady.
“U.K. politics might be in chaos, but at least the economy is ticking along nicely,” wrote David Madden, market analyst at CMC Markets.
Meanwhile, Prime Minister Theresa May was expected to ask the European Union for an extension of the fast-approaching March 29 Brexit deadline on Tuesday.
On Monday, the speaker of the British House of Commons said May’s government can’t propose a vote on the exact same Brexit deal that was rejected by lawmakers last week, thereby blocking a vote scheduled for Tuesday. What happens next is anybody’s best guess.
Brexit Brief: Commons Speaker drops ‘hand grenade’ on May’s third Brexit vote
The euro EURUSD, +0.0000% was also slightly stronger, buying $1.1357, versus $1.1341 late Monday.
Germany’s ZEW economic sentiment index for March was negative, but stronger than expected, while the current situation indicator undershot expectations.
During the Asian trading session, minutes from the Reserve Bank of Australia confirmed its commitment to a neutral policy stance, which squashed fears over impending monetary easing for now.
The Australian dollar AUDUSD, +0.0141% last fetched $0.7094, slightly down from $0.7105 late Monday in New York.
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