The greenback traded higher against a basket of currencies as the market remained watchful on the outcome of the Federal Reserve’s march Policy meeting happening today and as economic growth ached the euro zone.
During the session earlier, the U.S. dollar remained supported at 110.41 against its Japanese rival, ascending from its 17-month low of 109.94. The U.S. dollar index went up 0.15 percent at 94.76, recovering from the 5-month-low of 94.30 the previous sessions.
However, AUD/USD jumped to 0.24 percent at 0.7562 as oil prices rallied before the end of the session on Tuesday night. The NZD/USD dropped by 0.28 percent to trade at 0.6788 while the USD/CAD turned higher by 0.26 percent to 1.3171
Earlier today, the U.S. currency found support after an upbeat report from the Institute of Supply Management. ISM indicated a 54.5 non-manufacturing purchasing manager’s index for the month of March, which was relatively higher from 53.4 in February.
The greenback edged higher as the investors awaited the minutes of the Fed’s meeting, where clearer indication of an interest rate hike was highly anticipated. Since the start of the week, the meeting has been grabbing the attention of the investors and has affected the majority of the currencies.
On Tuesday, Governor Haruhiko Kuroda of the Bank of Japan said that he would impose necessary growth stimulus as rumors spread regarding the intervention of the Japanese officials to weaken the currency before it soared even higher.
Prior to this, Pime Minister Shinzo Abe told the press that whatever the circumstances they (countries) must definitely avoid competitive devaluation.“I think we should refrain from arbitrary intervention in currency markets” the prime minister of Japan stated
Elsewhere, the EUR/USD lost 0.31 percent to change hands at 1.1350 after a tight range between 1.1357 and 1.1405.
International Monetary Fund Managing Director Christine Lagarde confirmed low inflation, weak growth opportunities, lack of new jobs and high debt burdens on her speech at the Goethe Institute in Frankhurt.
She also reported that the growth minimum is weak, (the) risks are probably on the rise and confidence is sorely lacking after she challenged political leaders to enact stronger fiscal measures.
Meanwhile, the Federal Reserve Bank of Atlanta forecasted a lower US. GDP Growth of 0.4 percent after the weaker vehicle sales reported last Monday and the slump in real equipment investment growth as well as the real consumer spending growth.