The USD traded lower ahead of Fed’s announcement

The USD traded lower against the major currencies on Tuesday as investors await the release of the minutes from the Federal Reserve’s October policy meeting. Fed uncertainty weakened the USD on Tuesday.

European Central Bank board member Joerg Asmussen warned today that monetary authorities have to be “very careful” when considering the use of negative interest rates to steer the economy away from low inflation rates, which added support for the USD.

In U.S. trading on Tuesday, EUR/USD added 0.23% at 1.3538.

Data released on Tuesday indicated that the ZEW index of German economic sentiment increased to a four-year high in November.

The ZEW index of German economic sentiment rose to 54.6 this month from October’s 52.8 reading, high above market forecasts for the index to improve to 54.0.

Organization for Economic Co-operation and Development reported earlier today that the global economy will expand by 2.7% this year and 3.6% in 2014, down from forecasts of 3.1% and 4% in May.

The USD was down against the British Pound, with GBP/USD adding 0.09% at 1.6124.

The USD was up against the Japanese Yen, with USD/JPY adding 0.20% at 100.19, and down against the Swiss Franc, with USD/CHF losing 0.20% at 0.9110. The USD/JPY pair was expected to gain support at 132.21, the low from November 11, and resistance at 136.0, the high from October 29, 2009.

The USD traded mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.42% at 1.0473, AUD/USD up 0.51% at 0.9424 and NZD/USD trading up 0.26% at 0.8356.

The USD index was down 0.10% at 80.71.

The Euro was up against the Pound and up against the USD, with EUR/GBP trading up 0.14% at 0.8396 and EUR/USD trading up 0.18% at 1.3530.

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