DAILY FOREX UPDATES FOR 29/10/2014

MARKET HEADLINES
 

Dollar struggles as soft data push yields lower, Fed awaited
The US dollar nursed modest losses on Tuesday, having slipped overnight after soft economic data tempered risk appetite and pushed safe-haven US debt yields lower. Expectations of more dovish comments from the Federal Reserve, due to kick of its closely-watched two-day policy review later in the session, also weighed on the greenback. The greenback eased to 107.805 yen, retreating from Monday's near three-week peak of 108.38. It also ceded a bit of ground against the euro, which last traded at $1.2711 off Monday's low of $1.2665. The dollar was lifted earlier on Monday after a closely-watched Ifo report showed German business sentiment in October hit its lowest level in almost two years. But support for the US currency faded after weaker-than-expected US housing data was released later in the session, pushing Treasury yields lower. Data also showed US services sector activity slowed in October to a six-month low, while manufacturing output in Texas dipped, pointing to some moderation in economic growth early in the fourth quarter. The soft data reinforced expectations that the Fed will reassure markets that any interest rate hikes are a long way off even as it ends its massive bond-buying stimulus. The Fed kicks off its policy review later on Tuesday and is all but certain to announce the completion of its quantitative easing program when it wraps up its two-day meeting. "Trade overnight had a very distinctive feeling of 'wait and see'," said Evan Lucas, market strategist at IG.

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