Investing.com - The dollar rallied against its rivals Tuesday to trade near its highest level of the year after data showed consumer confidence hit an 18-year high in October.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.44% to 96.77, just shy of its year-to-date high of 96.86.
The Conference Board’s consumer confidence gauge rose to 137.9 in October from 135.3 in September, beating economists’ forecast for a reading of 136. That was the highest reading in since Sept. 2000.
"Consumers do not foresee the economy losing steam anytime soon," said Lynn Franco, director of economic indicators at The Conference Board. "Rather, they expect the strong pace of growth to carry over into early 2019."
The dollar was also helped by a slump in the pound to a 10-week low after credit rating agency Standard and Poor's warned that the UK would suffer a long recession if it crashes out of the European Union without securing a trade deal.
"In the scenario of a no-deal Brexit, our calculations indicate the UK would experience a moderate recession lasting four to five quarters, with GDP contracting by 1.2 percent in 2019 and 1.5 percent in 2020," S&P said in a statement.
GBP/USD fell 0.64% to $1.2711.
EUR/USD fell 0.17% to $1.1353 to remain near session lows of $1.1346 and the pairing is expected to continue to lose ground against the greenback.
The euro should continue falling in the short term, owing to concerns about Italy and weak eurozone data, while strong U.S. data and safe-haven demand will continue to lift the dollar, said Niels Christensen, currency strategist at Nordea.
Safe-haven yen, meanwhile, added to losses against the greenback from a day earlier as risk appetite returned.
USD/JPY rose 0.43% to Y112.85.
USD/CAD rose just 0.05% to C$1.3141 as 1% fall in oil prices drew muted a reaction in the loonie ahead of testimony from Bank of Canada governor Stephen Poloz in front of the House of Commons finance committee.