The dollar fell from a one-month high against the euro as stocks declined amid concern
losses in U.S.
credit markets may widen.
U.S. consumer spending rose 0.6% in June
following a 0.8% increase in May, the Commerce Department said. The median
forecast of economists was for an increase of 0.4%.
The Fed's preferred price gauge,
known as the core measure which excludes food and fuel, rose 0.3% last month
after a revised 0.2% May gain. The median forecast was for a 0.2% increase.
Policy makers will keep their target rate for overnight loans between
banks at 2% when they meet Tuesday.
The pound fell against the euro for
a third day and dropped versus the dollar after an industry report showed the U.K.'s
construction industry shrank in July at the fastest pace in 11 years.
The Australian dollar has
taken a big hit as
investors have been caught off guard by a sharp shift in expectations towards
interest rate cuts, tumbling nearly 3 percent against the dollar and yen last
week for its biggest weekly drop since the Bear Stearns collapse in March.
Traders said the Aussie likely had more room to fall as market players come
around to the view that the Reserve Bank of Australia, which holds a policy
meeting on Tuesday, could start cutting interest rates before long.
EUR/USD tested
$1.5620/30, but failed to set above the figure and back off to $1.5560. Later
rate resumed decline and fell to session low on $1.5525.
GBP/USDfellfrom$1.9755.
Rate broke thought $1.9700
support and after triggering some stops fell to $1.9600. Rebound to $1.9635 was
short-lived and pound refreshed session lows around $1.9580.
USD/JPY rose
from Y107.44 to Y108.30. Later rate set stable within the Y108.10/30 range.
In Europe today PMI
will come from EU countries, including UK.
But the main
focus is on FOMC’s decision on Fed’s rate at 18:15 GMT.
BeforeFOMCnon-manuf. ISMindexwillcome. Analysts predict index rose to 51,0 points
versus 48,2 points month earlier.