Investing.com - The U.S. dollar was stronger against other currencies on Tuesday as investors waited for the Federal Reserve to cut rates, while the pound continued to fall on fears of a no-deal Brexit.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.1% to 97.877 by 10:38 AM ET (14:38 GMT).
The Fed’s two-day monetary policy meeting starts on Tuesday, with a rate cut of at least 25 basis points expected on Wednesday.
Support for a cut of at least 50 basis points fell early in the month after upbeat U.S. economic data, including Friday’s GDP numbers.
The greenback was also supported by a huge rise in pending home sales in June, and upbeat consumer confidence data for July.
The dollar rose against the Japanese yen, with USD/JPY down 0.2% to 108.58 after the Bank of Japan left its interest rate unchanged at -0.1% overnight and revised its forecast for inflation down.
Sterling continued to decline after falling over 1% on Monday, as newly elected Prime Minister Boris Johnson told the Irish Prime Minister Leo Varadkar that he wants to take the U.K. out of the European Union by Oct. 31 regardless of whether or not there is a deal.
Johnson reiterated that he will not negotiate with the EU unless they take out the Irish backstop, an insurance policy to prevent a hard border between Northern Ireland and the Republic of Ireland. EU officials have said they will not renegotiate the deal that was made with former Prime Minister Theresa May.
GBP/USD slumped 0.5% to 1.2159, while EUR/USD was flat at 1.1144, and USD/CAD gained 0.1% to 1.3178.