Dollar Rises Against Major Counterparts Ahead Of Fed Policy Decision

The U.S. dollar gained against its major counterparts on Tuesday after data showing a jump in employment cost index raised concerns the Federal Reserve will further delay an interest rate cut.

The Fed, which is scheduled to announce its monetary policy on Wednesday, is widely expected to leave interest rate unchanged. The accompanying statement and Fed Chair Jerome Powell's post meeting press conference for clues about future interest rate moves.

The employment cost index increased 1.2% from 0.9% in the fourth quarter. Economists had expected the index to rise to 1%.

A report from MNI Indicators showed Chicago-area business unexpectedly contracted at an accelerated rate in the month of April.

The report said the Chicago business barometer dropped to 37.9 in April from 41.4 in March, with a reading below 50 indicating contraction. Economists had expected the index to rise to 44.9.

With the unexpected decrease, the Chicago business barometer fell to its lowest level since November 2022.

A report released by the Conference Board showed consumer confidence in the U.S. deteriorated by much more than expected in the month of April.

The Conference Board said its consumer confidence index slid to 97.0 in April from a downwardly revised 103.1 in March. Economists had expected the index to dip to 140.0 from the 104.7 originally reported for the previous month.

The dollar index climbed to 106.35, gaining about 0.75%.

Against the Euro, the dollar firmed to 1.0666 from 1.0722. Against Pound Sterling, the dollar strengthened to 1.2491 from 1.2563. The dollar settled at 157.80 yen against the Japanese currency.

The dollar firmed to 0.6473 against the Aussie, and against the Loonie the dollar strengthened to C$ 1.3781. Against Swiss franc, the dollar was up at CHF 0.9195.

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