The US dollar is recording gains versus the euro during early Tuesday trading. However, the greenback’s performance during the month of April has been subdued, when compared to that of the single currency, as Europe’s improving health and economic outlook offered support to the euro, while the dollar was weighed down by the brighter global outlook that triggered the unwinding of safe-haven trades, as well as by the Fed’s commitment to its current accommodative policies. It is therefore interesting that the American currency is finding support ahead of the FOMC meeting starting today; a dynamic that reflects the expectations of some investors that the central bank may choose April to hint at future change in direction. This is unlikely though, with June’s meeting appearing more likely to bring any substantial changes in direction. Until then, the dollar may remain under pressure.
Ricardo Evangelista – Senior Analyst, ActivTrades