The dollar fell against major currencies on Tuesday ahead of monetary policy decisions of Europe and major US economic reports.

The European Central Bank and the Bank of England are due to update their monetary policies on Thursday. Analysts forecast that the Bank of England would cut its key interest rate, which is at a historic low of 1.5 percent, by up to 1 percentage point. The European Central Bank is expected to keep its key rate unchanged at 2 percent.

Investors are waiting for some major US economic reports due later this week, including factory orders and non-farm employment payrolls. Risk aversion trades were suppressed as the market stayed calm.

The dollar was also hurt by a better-than-expected pending home sales report that boosted risk appetite. US pending home sales increased in December as more buyers took advantage of improved conditions, the National Association of Realtors said on Tuesday.

The Pending Home Sales Index rose 6.3 percent to 87.7 from an upwardly revised reading of 82.5 in November. Based on signed real estate contracts for existing homes, the index is a leading indicator of housing activity. A signed contract is not counted as a sale until the transaction closes.

The euro bought US$1.3007 in late New York trading compared with US$1.2827 late on Monday. The pound rose to US$1.4421 from US$1.4269.

The dollar fell to 1.2347 Canadian dollars from 1.2449 Canadian dollars and to 1.1446 Swiss francs from 1.1630 Swiss francs. It also fell to 89.26 Japanese yen from 89.60 Japanese yen.

(Xinhua News Agency February 4, 2009)