Dollar falls with the Fed in the spotlight

Por John McCrank

NEW YORK, Jul 27 (Reuters) – The dollar was lower Tuesday against a basket of even currencies as investors avoided making big bets before the Federal Reserve’s two-day monetary policy meeting ended.

* The greenback was down 0.254% at 92.371 as of 1535 GMT, not that far from its three-and-a-half month high of 93.19 reached on July 21.

* The dollar has advanced broadly for more than a month on expectations that as the economic recovery gains momentum, the Fed will begin to reduce its monetary support. Last week, investors took long positions on the dollar for the first time since March 2020, data showed.

* The Fed kicks off its two-day meeting on Tuesday, which will be followed by a press conference on Wednesday from central bank chairman Jerome Powell, where investors will be watching for any comments on a reduction in asset purchases.

* “I think he’s going to point to markets that have been discussing the size of the drawdown, they discuss how to do it, but they’re still in a certain wait-and-see mode anyway, given where we are in the recovery.” said Edward Moya, senior market analyst at OANDA.

* The euro was up 0.25% at $ 1.1829, while the pound was up 0.48% at $ 1.3883.

* At the data level, consumer confidence in the United States held to a 17-month high in July, suggesting that the economy maintained its strong growth at the beginning of the third quarter.

* Additionally, continued fiscal support and improved access to COVID-19 vaccines led the International Monetary Fund to improve its outlook for the United States and other wealthy nations on Tuesday, while lowering its estimates for several developing economies. Overall, the IMF maintained its 6% global growth forecast for 2021.

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