The
dollar rose to a six-week high against the euro before a Federal
Reserve meeting today at which policy makers may leave interest rates
on hold and highlight concern that inflation needs to be contained.
The
U.S. currency also climbed against the British pound after a report
yesterday showed personal spending exceeded forecasts and as crude oil
fell to a 13-week low, adding to optimism lower fuel prices will help
sustain U.S. economic growth. The yen rose against all 16 major
currencies as concern that financial-market losses
are deepening reduced demand for higher-risk investments funded in
Japan.
The euro weakened on speculation a slowing economy will deter the European Central Bank from raising interest rates.
Retail
sales in the 15 countries that share the euro fell 1.3 percent in June
from a year earlier, reversing a 0.3 percent gain in May, according to
a Bloomberg News survey. The European Union's statistics office will
release the data at 11 a.m. in Luxembourg today.
The ECB
will leave its benchmark rate on hold at 4.25 percent when it announces
a decision on Aug. 7, a separate survey showed. The ECB raised rates by
a quarter of a percentage point on July 3 to curb the fastest inflation
in 16 years.
EUR/USD consolidated within $1.5520/30 before pressure resumed and the pare piersed $1.5500 mark. Rate posted low at $1.5460, before rebounded to $1.5490.
GBP/USD lowered from $1.9585 to low around $1.9525. Bids $1.9525/15. stronger at $1.9500 and $1.9480/70. . Offers at $1.9575/80.
USD/JPY got support at Y107.65, before failed to clear back above Y108.00. Rate trades now at Y107.85. Bids Y107.50, Y107.30/20. Offers Y108.40
The main focus is on FOMC’s decision on Fed’s rate due at 18:15 GMT. The benchmark rate will be held at 2.00%. Before FOMC non-manuf. ISM index will come. Analysts predict index rose to 51,0 points versus 48,2 points month earlier.