FOREX-Dollar just below recent peaks as investors await Fed meeting

FOREX-Dollar just below recent peaks as investors await Fed meeting

SINGAPORE Reuters -- The US dollar was just below the recent peaks on Wednesday, as investors waited to hear from the Federal Reserve and pondered whether weak U.S. data may slow the pace of rate hikes.

Growth concerns are deeper in Europe as a result of the disapointing U.S. services and manufacturing surveys released overnight and a plunge in new home sales last month.

The euro was briefly buying $1 in New York trade, but by the Asia morning it was under pressure at $0.9958 - barely above Tuesday's low of $0.99005. The yen gave back some overnight gains to hover around 136.85 per dollar.

The US S&P Global flash composite PMI fell to 45 - the lowest since May 2020 and in contraction territory for the second straight month, while new home sales hit a 6 -- 1 2 year low.

After Britain's composite purchasing managers index managed to stay in growth territory, sterling gained some support overnight, though it hasn't really pierced investors' gloom over British or Europe's outlook.

The pound is at $1.1817 after hitting a 2 year old 2 year low of $1.1718 on Tuesday.

Ray Attrill, head of FX strategy at National Australia Bank, said it was just a matter of time before the hard data reflects the reality of the brutal energy price rises confronting U.K. households.

The Australian and New Zealand dollar bounced overnight but started to give back gains in Asia trade. The Aussie fell by 0.2% to $0.6912, while the kiwi was down 0.3% to $0.6192.

All eyes now turn to Jackson Hole, Wyoming, where the Federal Reserve holds its annual symposium and Fed Chair Jerome Powell is due to speak on Friday.

The U.S. dollar index, which measures the dollar against a basket of currencies, rose 0.1% to 108.70 on Wednesday, and July's two-decade high of 109.29 beckons.

Chris Weston, head of research at Pepperstone in Melbourne, said the Jackson Hole symposium is not really going to give us a lot of reasons to want to sell dollars.

I think Powell might keep his foot down, and that makes us want to buy dollars. Any sort of pullback in the dollar is a buying opportunity. In a speech on Tuesday, Minneapolis Fed BankFed Bank President Neel Kashkari said there was a need for more aggressive rate hikes to control inflation.