Dollar Recovers After Early Weakness As Traders Eye Policy Meetings

The U.S. dollar, which drifted lower in the European session, recovered and gained in strength subsequently, riding on strong consumer confidence and new home sales data.

Meanwhile, traders looked ahead to upcoming monetary policy meetings of the European Central Bank(ECB), the Bank of Canada and the Bank of Japan.

The ECB is expected to take a dovish stance when it meets on Thursday. Central bank meetings in Japan and Canada are also scheduled this week.

The U.S. Federal Reserve meets next week, and it is likely that the U.S. central bank will announce plans to begin scaling back its asset purchase program.

A report from the Commerce Department showed new home sales in the U.S. skyrocketed in the month of September, soaring by 14% to an annual rate of 800,000 after falling by 1.4% to a downwardly revised rate of 702,000 in August. Economists had expected new home sales to jump by 2.7% to an annual rate of 760,000.

The Conference Board said its consumer confidence index climbed to 113.8 in October from an upwardly revised 109.8 in September. Economists had expected the consumer confidence index to edge down to 109.0 from the 109.3 originally reported for the previous month.

The dollar index, which dropped to 93.71, climbed to 94.02 by noon before easing a bit. At 93.93, the index is up 0.13% from the previous close.

Against the Euro, the dollar is trading at 1.1600 up from Monday’s close of 1.1611.

The Pound Sterling is little changed against the dollar, fetching $1.3765 a unit.

The dollar is trading at 114.14 yen, gaining nearly 0.4% from 113.71.

Against the Aussie, the dollar advanced to 0.7526 before drifting down to 0.7507.

The Swiss franc is roughly flat at 0.9196 a dollar, after having firmed to 0.9187 from 0.9227, while the Loonie trading at 1.2386 a dollar.

The material has been provided by InstaForex Company – www.instaforex.com