Dollar slumps to three-week low as traders await Fed

Dollar slumps to three-week low as traders await Fed

The dollar hit a three-week low on Tuesday as investors eyed a U.S. Federal Reserve meeting starting later in the day that could offer clues as to whether bets on an interest rate hike in the coming months are justified.

Worries that the U.S. economy is stalling, following a run of weaker-than-expected data, have seen the dollar lose around 4 percent in the past six weeks as expectations of an interest rate rise in June have faded. But many still expect the Fed to lift rates in September.

U.S. housing index data and consumer confidence numbers, due at 1300 GMT (9.00 a.m. EDT) and 1400 GMT (10.00 a.m. EDT) respectively, should provide the greenback with some near-term direction, analysts said, though the main focus will be on the Fed’s statement at the end of its policy meeting on Wednesday.

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