Forex — Dollar Struggles to Hold gains as FOMC gets underway

USD/CAD rose to session highs after Canadian GDP forecasts missed – The dollar traded modestly higher against a basket of major currencies, driven by a pair of economic reports on manufacturing growth and consumer confidence exceeded expectations, the underlying strength of the US economy.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.06% to 94.44.

Investors-Outlook on the US economy continue to be bullish, as consumer confidence rose to the highest level since 2008, while the economic activity in the Chicago area jumped to a six-and-a-half-year high in October.

The Conference Board’s consumer confidence gauge rose to 125.9 in October to EUR 119.8 in September, beating economists forecast for a reading of 121.

The consumer confidence spending is a leading indicator of the consumer, which plays an important role in the economic activity.

The Chicago Purchasing Managers’ Index (PMI) increased to 66.2, the September reading of 65.2. The exceeded expectations for a reading of 61. As an early indicator of the U.S. economy, the Chicago PMI economists measure helps the business activity and new orders.

The duo reports to come, as the Federal Open Market Committee two-day meeting began on Tuesday with an interest rate decision scheduled for Wednesday.

The dollar has struggled to add to recent gains as investors expected more hints on the monetary policy of the Fed and President Donald Trump on the election of the candidate at the top of the Fed in February.

A rise in the pound, meanwhile, covered the head in the greenback amid growing expectations that the Bank of England Hiking interest rates for the first time in more than a decade on Thursday.

GBP/USD added 0.55% to $1.3280, while USD/JPY climbed 0.46% to Y113.70

EUR/USD rose by 0.04% to $1.1655, while EUR/GBP 0.48% £0.8779 fell expectations, as data showed Euro-zone inflation for October, below the.

USD/CAD climbed 0.48% to C$1.2896, as the loonie came under pressure after data showed that Canada’s economy slowed unexpectedly in August.

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