Dollar weakens on consumer report
Currency loses some ground against euro as index posts 5th lowest reading ever.
NEW YORK (CNNMoney.com) -- The dollar lost ground against the 15-nation euro Tuesday as a key economic report showed a large drop in consumer confidence.
U.S. currency also fell against the Japanese yen after Tokyo's Nikkei stock market index fell for the fourth day in a row.
The euro was buying $1.55941 U.S. dollars on Tuesday morning trading, up from $1.5518 a day earlier, while the dollar purchased ¥107.61, down from ¥107.8505.
The Conference Board's Consumer Confidence index, a key measure of the economy's health, tumbled to 50.4 from 58.1 in May, the fifth worst reading ever. The index signaled a further slowdown in the U.S. economy as dollar inflation becomes more of a concern.
Fed statement Inflation has been a major concern for the Federal Reserve, which was beginning a two-day meeting on interest rates Tuesday.
"We're pretty much in a stall until the [Fed] meeting," said Boris Schlossberg, currency strategist with FXCM.
Most investors believe the Fed will hold its interbank lending rate, which helps control inflation, steady. Investors will be paying close attention to the Fed's phrasing to get a sense of it's stance on inflation.
"If they put out a neutral statement that looks non-committal," you could see a major selloff, said Schlossberg.
The U.S. central bank releases its statement Wednesday. 
