2020.08.2520:25:00UTC+00U.S. Dollar Moves Lower As Powell Speech Looms

The value of the U.S. dollar has moved to the downside during trading on Tuesday, with the U.S. dollar index dipping 0.3 percent to 93.01.

The greenback has fallen to $1.1834 against the euro compared to yesterday's $1.1788, although the greenback has risen to 106.38 yen compared to the 105.98 yen it fetched at the close of New York trading on Monday.

The weakness in the dollar comes as traders look ahead to Federal Reserve Chair Jerome Powell's speech to the Jackson Hole symposium on Thursday.

Analysts have suggested Powell will signal an increased tolerance for higher inflation, with some predicting he will call for a shift to "average inflation" targeting rather than the long-standing 2 percent target.

Easing concerns about tensions between the U.S. and China may also have reduced the safe-haven appeal of the dollar, as U.S. and Chinese officials held a phone call yesterday to discuss the implementation of the Phase 1 trade agreement.

A statement from the U.S. Trade Representative said both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement.

Traders were also digesting a mixed batch of U.S. economic data, with separate reports showing a much bigger than expected spike in new home sales and an unexpected deterioration in consumer confidence.

The Commerce Department released a report showing new home sales spiked by 13.9 percent to an annual rate of 901,000 in July after soaring by 15.1 percent to a rate of 791,000 in June.

Economists had expected new home sales to climb by 1.2 percent to a rate of 785,000 from the 776,000 originally reported for the previous month.

The much bigger than expected jump lifted new home sales to their highest annual rate since reaching 998,000 in December of 2006.

Meanwhile, a separate report from the Conference Board showed its consumer confidence index slumped to 84.8 in August after tumbling to a downwardly revised 91.7 in July.

The continued decrease came as a surprise to economists, who had expected the index to inch up to 93.0 from the 92.6 originally reported for the previous month.