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The dollar hit a new record low against the euro on Tuesday as a surprise plunge in U.S. consumer confidence to nearly two-year lows raised expectations of another Federal Reserve interest rate cut next month. This was the fourth straight session that the dollar tested all-time lows against the euro, which has gained on signs of weaker U.S. growth and the view that lower U.S. rates will continue to erode the dollar's yield advantage. That view gained more traction on another report on Tuesday showing sales of existing U.S. homes slipped by 4.3 percent in August, a sign of yet more weakness in the housing market. "The housing data confirmed what we already know, but the confidence number at a two-year low is a concern. It highlights that there's been a shift in the consumer outlook, and that will be important for the Fed," said Camilla Sutton, currency strategist at Scotia Capital in Toronto.

The dollar rose against sterling, however, after a report in a British newspaper sparked worries over troubles in the UK financial sector arising from the credit crisis. Divyang Shah, a currency strategist at Commonwealth Bank in London, said the weaker confidence numbers haven't helped, though he added markets should "probably keep an eye on what households are doing as opposed to what they are saying."

The U.S. Conference Board's index of consumer sentiment fell to 99.8 in September, the lowest since November 2005 and down from 105.6 in August. Economists expected a more modest slip to 104.0.

The dollar traded around the levels of 1.4135 vs. the Euro, 114.76 against the yen and 2.0185 against the sterling at 20:45 (GMT).


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Today's Economic Events

DateEventCountryPeriodPrevious ForecastSignificance
00:00 GMTLeading Index m/mAUDAug0.40%0.30%2
06:00 GMTConsumer ConfidenceEUROct7.672
08:30 GMTCurrent AccountGBPQuarterly-12.2B-11.3B3
08:30 GMTGDP Annualized q/qGBPQuarterly0.80%0.80%3
09:30 GMTLeading Index m/mCHFSep2.062.012
12:30 GMTDurable Goods Orders m/mUSDAug6.00%-3.10%3
12:30 GMTCore Durable Goods Orders m/mUSDAug3.70%-0.80%3
14:30 GMTCrude Oil InventoriesUSDWeekly-3.8M3
15:10 GMTECB President speaksEURSep2