Forex - Dollar mixed to higher on upbeat U.S. consumer confidence data

Written By Unknown on Rabu, 01 Januari 2014 | 08.10

Investing.com - The dollar traded mixed to higher against most major currencies on Tuesday after widely-watched consumer confidence data beat expectations and cemented expectations for the Federal Reserve to continue scaling down stimulus programs in 2014.

In U.S. trading on Tuesday, EUR/USD was down 0.30% at 1.3759.

The Conference Board reported earlier that its index of U.S. consumer confidence improved to 78.1 in December from 72.0 in November, beating consensus forecasts for a 76.0 reading.

Also Tuesday, the Standard & Poor's/Case-Shiller 20-city home price index rose at an annualized rate of 13.6% in October from a year earlier, the strongest pace since February of 2006 and above forecasts for an increase of 13.0%.

The data confirmed expectations for the Federal Reserve to continue winding down stimulus programs such as its USD75 billion in monthly bond purchases next year and let the economy stand on its own feet.

Fed bond purchases tend to weaken the dollar by driving down interest rates to spur recovery.

Capping the dollar's gains, however, were industry data revealing that the Chicago purchasing managers' index fell to a seasonally adjusted 59.1 this month from 63.0 in November. Analysts had expected the index to decline to 61.0 in December.

The greenback was down against the pound, with GBP/USD up 0.37% at 1.6560.

Demand for the pound was strong due to recent weeks of positive U.K. economic reports, which fueled expectations on Tuesday for the Bank of England to raise interest rates ahead of other central banks.

Optimism for BoE policy shifts overshadowed solid U.S. consumer confidence data.

The dollar was up against the yen, with USD/JPY up 0.09% at 105.24, and up against the Swiss franc, with USD/CHF up 0.42% at 0.8914.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.17% at 1.0629, AUD/USD up 0.30% at 0.8932 and NZD/USD trading up 0.32% at 0.8230.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.16% at 80.30.

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