Dollar ends mixed after paring losses as market awaits Fed's rate decision

Marrket Review - 18/12/2018  23:59GMT  

Dollar ends mixed after paring losses as market awaits Fed's rate decision

The greenback ended the day lower against majority of its peers on Tuesday on caution ahead of the Federal Reserve's rate decision on Wednesday and due to drop in U.S. stocks and Treasury yields. However, despite initial weakness in Asia and European morning, traders took profit and lifted the greenback in New York session.  
  
Versus the Japanese yen, dollar remained under pressure and dropped to 112.47 in Asia before recovering. The pair met renewed selling at 112.66 at European open and fell to an intra-day low at 112.25 in Europe due to a drop in U.S. Treasury yields, however, price pared its losses and staged a short-covering rebound to 112.63 in New York morning before stabilising.  
  
Although the single currency dropped to session lows at 1.1337 at European open, price erased its losses and rallied to an intra-day high at 1.1402 in Europe on dollar's broad-based weakness. Later, euro pared its gains and retreated to 1.1350 in New York.  
  
The British pound traded with a firm bias in Asia and gained to 1.2663 in early European morning before rallying to session highs at 1.2706 in Europe on dollar's weakness. However, cable pared its gains and retreated sharply to 1.2621 in New York session due partly to cross-selling of sterling especially vs euro.  
  
In other news, Reuters reported the British government is not planning to hold an indicative vote in parliament to test support for various Brexit options, Prime Minister Theresa May's spokesman said on Tuesday.  
  
With parliament at an impasse, currently unwilling to support May's deal with Brussels, several ministers have said they are open to putting the range of options to parliament to see if there is a majority for any of them.  
  
On the data front, the Munich-based Ifo economic institute said its business climate index, based on a monthly survey of companies, declined to 101.0 from 102.0 in November. The reading was below expectations for 101.8. The current assessment sub-index fell to 104.7 from 105.4, compared to expectations for 104.9.  
  
Data to be released on Wednesday :  
  
New Zealand Westpac consumer survey, current account, Australia Westpac leading index, Japan exports, imports, trade balance, all industry activity index, Germany producer prices, UK DCLG house price index, CPI, RPI, PPI input prices, PPI output prices, EU construction output, Canada CPI, and U.S. MBA mortgage application, current account, existing home sales, Fed interest rate decision.