Dollar Drifts Lower On Hopes Fed Might Slowdown Pace Of Rate Hikes

(RTTNews) - The U.S. dollar drifted lower on Tuesday amid hopes the Federal Reserve might slow down the pace of interest rate hikes as data showed a contraction in US business activity in the month of October.

On Monday, a monthly S&P Global survey of purchasing managers showed both manufacturers and services firms reported weaker client demand in October.

The S&P Global US Composite PMI declined to 47.3 in October 2022, down from 49.5 in the previous month, pointing to the second-fastest pace of contraction in the sector since 2009.

The S&P Global US Manufacturing PMI fell to 49.9 in October of 2022 from 52 in September, while the S&P Global US Services PMI dropped to 46.6 in October 2022 from 49.3 in the previous month.

A report released by the Conference Board released today showed U.S. consumer confidence pulled back by much more than expected in the month of October.

The Conference Board said its consumer confidence index slumped to 102.5 in October from a revised 107.8 in September. Economists had expected the index to dip to 106.0 from the 108.0 originally reported for the previous month.

A report from the Federal Housing Finance Agency showed the average prices of single-family houses with mortgages guaranteed by Fannie Mae and Freddie Mac in the US rose 11.9 percent year-on-year in August 2022, the least since December 2020.

Meanwhile, house prices in the U.S. dropped 1.6% month-over-month in August of 2022, the biggest drop since March of 2009, the results for the S&P CoreLogic Case-Shiller Indices showed.

The dollar index dropped to 110.76 and despite recovering some lost ground, remains weak at 110.90, down nearly 1% from the previous close.

Against the Euro, the dollar weakened to 0.9970 from 0.9875.

The dollar is trading at $1.1472 against Pound Sterling, drifting down from $1.1279.

Against the Japanese currency, the dollar is weak, fetching 147.91 yen a unit, compared with 149.01 yen on Monday.

Against the Aussie, the dollar is trading at 0.6391 as against the previous close of 0.6314.

The dollar is weak against Swiss franc, fetching CHF 0.9946, compared to CHF 1.0008.

Against the Loonie, the dollar is down more than 0.7% at C$1.3604, as oil prices rebounded to close notably higher.