(Bloomberg) — The dollar weakened against the euro and the yen before the Federal Reserve announces its latest monetary policy decision in Washington on Wednesday.
The Bloomberg Dollar Spot Index fell for a third day after U.S. reports this week tempered economic optimism. The measure surged to the strongest level since at least 2004 on Friday amid speculation the Fed may remove wording describing its stance on raising interest rates as "patient." Chair Janet Yellen speaks to the press beginning at 2:30 p.m. in Washington.
"Some investors are locking in some profits on the long-dollar positions ahead of the Fed," said Jane Foley, a senior foreign exchange strategist at Rabobank International in London, referring to bets on the U.S. currency's appreciation. "The market is very long dollar and bear in mind that many U.S. economic data releases have been weak recently."
The dollar depreciated 0.2 percent to $ 1.0617 per euro at 7:28 a.m. New York time, after reaching $ 1.0458 on Monday, the strongest level since January 2003. The U.S. currency declined 0.2 percent to 121.16 yen.
Bloomberg's dollar index, which tracks the greenback against 10 major currencies, slipped 0.1 percent to 1,215.54 after dropping 0.5 percent in the past two days. The gauge reached 1,222.12 on March 13, the highest closing level based on data back to 2004.
The dollar has fallen versus most of its 16 major counterparts this week as data on industrial production, manufacturing and housing starts fell short of economist estimates. Bloomberg's ECO U.S. Surprise Index, which measures whether data beat or missed analyst forecasts, slid to minus 0.73 on Tuesday, the least since March 2009.
To contact the reporters on this story: David Goodman in London at dgoodman28@bloomberg.net; Anchalee Worrachate in London at aworrachate@bloomberg.net
To contact the editors responsible for this story: Paul Dobson at pdobson2@bloomberg.net Todd White
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