Investing.com

Investing.com - The greenback moved higher against most major currencies on Tuesday after an upbeat consumer confidence report kept expectations strong that the Federal Reserve will conclude a policy meeting on Wednesday with fresh cuts to its USD75 billion monthly bond-buying program.



U.S. trading on Tuesday, EUR/USD was down 0.07% at 1.3664.



The Conference Board said its index of consumer confidence improved to 80.7 this month from a downwardly revised 77.5 in December.



Analysts were expecting the index to rise to 78.1, and the numbers fueled expectations that the Fed will conclude a two-day policy meeting on Wednesday announcing fresh cuts to its USD75 billion bond-buying program, likely by USD10 billion.



Fed asset purchases aim to weaken the dollar by driving down long-term interest rates, thus sending investors to asset classes like stocks, while talk of their dismantling often strengthens the greenback.



Meanwhile a separate report showed that U.S. durable goods orders fell unexpectedly in December, which capped the greenback''s gains.



The Commerce Department reported earlier that durable goods orders fell 4.3% in December, confounding expectations for a 1.8% gain.



Core durable goods, which are stripped of volatile transportation items, orders fell 1.6% in December, the largest drop since March, compared to forecasts for a 0.5% increase.



Orders for core capital goods, a key barometer of private-sector business investment, fell 1.3% last month, confounding expectations for a 0.5% gain and after rising 2.6% in November.



Still, investors bet that months of broad improvements to U.S. economic indicators will prompt the Fed to continue tapering its USD75 billion bond-buying program.



The greenback was up against the pound, with GBP/USD down 0.05% at 1.6577.



In the U.K., data showed that the British economy grew 0.7% in the final three months of 2013 and expanded 2.8% from a year earlier, both figures in line with expectations.



While the data left markets without a clear weather vane as to when the Bank of England may raise interest rates, the figures were strong enough to curb the pound''s losses against the greenback.



The dollar was up against the yen, with USD/JPY up 0.30% at 102.86, and up against the Swiss franc, with USD/CHF up 0.19% at 0.8979.



The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.36% at 1.1156, AUD/USD up 0.37% at 0.8771 and NZD/USD up 0.35% at 0.8262.



The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.12% at 80.67.



On Wednesday, the dollar will move on the Fed''s announcement on interest rates and monetary policy as well as its language.











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