NEW YORK: The dollar fell on Tuesday, as US durable goods and home price data disappointed investors and raised worries about the economy as Federal Reserve officials began a two-day policy meeting.
The greenback, while weaker against most major currencies, fared better than the Swedish crown after Sweden's central bank surprised investors by adopting a zero interest rate policy in a bid to ward off deflation.
The crown fell to a four-year low versus the dollar.
Given recent signs of slowing in US business activity and with inflation below the Fed's 2 percent target, analysts and traders widely expect the US central bank to telegraph it would be unlikely to raise rates before mid-2015, although it will likely end its third round of quantitative easing.
The Federal Open Market Committee, the Fed's policy-setting group, is scheduled to release a statement at 2 p.m. (1800 GMT) Wednesday.
"The data definitely missed expectations, but the market is still treading water until after the FOMC meeting," said David Rodriguez, quantitative strategist at DailyFX in New York.
The US Commerce Department said orders for big-ticket items such as airplanes fell 1.3 percent in September following an 18.3 percent plunge in August. Analysts had expected a 0.5 percent rise last month.
On the real estate front, S&P and Case-Shiller reported their index of home prices in 20 US cities fell 0.1 percent in August, contrary to an expected 0.1 percent rise.
The dollar's decline was limited after the Conference Board said its index of US consumer confidence, which some analysts see as a predictor of consumer spending, rose in October to its highest in seven years.
The dollar index, which gauges the greenback against a basket of six currencies, last traded 0.1 percent lower at 85.40 after touching its lowest in four sessions.
The greenback briefly turned negative against the yen on the weaker domestic data but regained most of its earlier rise and was last up 0.2 percent at 108.02 yen, not far from Monday's nearly three-week peak of 108.38.
The dollar weakened against the euro, with the euro zone currency last at $1.2737, up 0.3 percent on the day. On the other hand, the dollar rose as high as 7.3824 crowns, its highest since September 2010. It last traded at 7.3320 crowns, up 0.5 percent on the day.
In afternoon trading, the sterling shaved early gains versus the dollar after Bank of England Deputy Governor Jon Cunliffe said the central bank could leave rates near their record low for longer than first thought.
The pound clung to a 0.08 percent rise against the greenback at $1.6133.
Cunliff's remarks "reinforce the overriding concerns about global growth, which might cause a delay in tightening policy at the BOE and the Fed," said Kathy Lien, managing director at BK Asset Management in New York.
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