The U.S. dollar came off recent highs on Tuesday as markets looked ahead to the Federal Reserve’s interest rate decision, due on Wednesday.
The Federal Reserve begins its two-day meeting later today and is expected to deliver a 50 basis point interest rate hike on Wednesday.
The Fed is expected to begin reducing its balance sheet that has swollen to nearly $9 trillion.
On the economic front, new orders for U.S. manufactured goods spiked by more than expected in the month of March, according to a report released by the Commerce Department.
The report showed factory orders surged by 2.2% in March following a revised 0.1% uptick in February. Economists had expected factory orders to jump by 1.1% compared to the 0.5% drop originally reported for the previous month.
Meanwhile, data showed the number of job openings in the US rose by 205,000 from a month earlier to a series high of 11.549 million in March of 2022.
The dollar index, which rose to 103.93 on Monday, dropped to a low of 103.03 in the New York session today before recovering some lost ground. At 103.47, the index is down by about 0.28% from the previous close.
Against the Euro, the dollar moved to $1.0520, and against Pound Sterling, it settled at $1.2501.
The pound advanced against its major counterparts. The Bank of England is expected to hike interest rate by 25 basis points on Thursday.
The BoE has raised interest rates at three consecutive meetings and a fourth increase would take rate to 1%, a level not seen since early 2009.
The dollar was little changed against the yen, closing at 130.14 yen.
Against the Aussie, the dollar dropped to 0.7096 from 0.7051. The Reserve Bank of Australia raised the cash rate by 25 basis points to 35 basis points unexpectedly.