Dollar Pares Some Early Gains Ahead Of Fed Policy

(RTTNews) - The U.S. dollar pared some early gains against a few of its major counterparts on Tuesday as traders digested the latest batch of economic data and awaited the Federal Reserve's monetary policy announcement on Wednesday.

The Fed is widely expected to leave rates unchanged tomorrow, but is very likely to sound dovish with regard to the outlook for future interest rate moves.

According to CME Group's FedWatch Tool, there is currently an 89.6% chance the Fed will lower rates by a quarter point in September and a 10.1% chance of a half point rate cut.

The Bank of Japan and the Bank of England are scheduled to make their monetary policy announcements on Wednesday and Thursday, respectively.

A report released by the Conference Board showed consumer confidence in the U.S. unexpectedly improved from a downwardly revised level in the month of July.

The Conference Board said its consumer confidence index rose to 100.3 in July from a downwardly revised 97.8 in June. Economists had expected the consumer confidence index to edge down to 99.5 from the 100.4 originally reported for the previous month.

The Labor Department released a report showing a slight decrease in job openings in the U.S. in the month of June. The report said job openings edged down to 8.18 million in June from an upwardly revised 8.23 million in May.

Economists had expected job openings to dip to 8.03 million from the 8.14 million originally reported for the previous month.

Later in the week, the focus will shift to the Labour Department's closely watched monthly jobs report for July.

The dollar index, which climbed to 104.80 in early New York session, pared gains as the day progressed, dropping to 104.49. The index was last seen at 104.57, up slightly from the previous close.

Against the Euro, the dollar firmed to 1.0810 after having weakened to 1.0838 earlier in the day. The dollar strengthened to 1.2832 against Pound Sterling from 1.2861.

The dollar weakened against the Japanese currency, easing to 153.17 yen a unit, losing nearly 0.6% from Monday's close. Against the Aussie, the dollar gained, firming to 0.6537.

The dollar weakened against Swiss franc, dropping to CHF 0.8838, and against the Loonie, it was little changed at C$1.3854.