US Dollar Under Pressure Ahead of Active Week

The US dollar index was on its heels Monday, as investors shift their attention to a potentially volatile week of trade headlined by the Federal Reserve monetary policy meetings.

The US dollar index was down nearly 0.1 percent at 79.69. The gauge has declined more than 0.3 percent over the past five sessions, as mixed economic data kept demand for the greenback relatively subdued.

In economic news, US pending home sales rebounded sharply in March, the National Association of Realtors reported today. Contracts to buy previously-owned homes rose 3.4 percent in March, following a revised drop of 0.5 percent.

The Dallas Fed manufacturing index for April rose from 4.9 to 11.7, as the business outlook improved considerably. The production index, which measures state manufacturing activity, rose from 16.1 to 24.7, the highest level in four years.

Markit Group reported last week the US manufacturing industry continued to improve at the start of the second quarter, as output and new orders rose at a sharper rate.

The Commerce Department will report on first quarter GDP Wednesday, the same day the Federal Reserve is expected to make its monetary policy announcement. The Fed has pared asset purchases in each of its last three meetings. The markets are speculating whether the weather-induced slowdown in Q1 could impact the Fed’s bond tapering plans at the April meetings. The US economy is believed to have expanded just 1.1 percent annually in the first quarter.

Friday sees the release of US nonfarm payrolls, courtesy of the Labor Department. A consensus of economists polled by Reuters forecasts a gain of more than 200,000 payrolls in April, with average earnings rising by 0.2 percent.