The dollar fell against a basket of currencies on Tuesday after data showed in US consumer confidence fell in September, raising worries about the strength of the US economy. US consumer confidence fell by the most in nine months, more than expected, as Americans' economic outlooks darkened in the face of the US-China trade war, according to a private- sector report released on Tuesday. The Conference Board, an industry group, said its index of consumer attitudes fell to 125.1, from an downwardly revised 134.2 the month before.

"It is a worrying early sign that consumer spending, the key bastion of strength for the US economy in recent months, may not be immune to the trade war," Michael Pearce, senior US economist at Capital Economics, said in a note. The dollar index, which measures the US currency against six major currencies, was down 0.1%. The dollar lost ground earlier against the euro after data showed German business morale rose in September for the first time in six months. Gains for the euro were capped, since the German economy is still likely to slip into recession as the US-China trade conflict and Brexit bite, the Ifo economic institute said.

That followed Monday's euro zone composite flash Purchasing Managers' Index (PMI) on Monday, which sank to 50.4 in September from 51.9 in August, lower than all forecasts in a Reuters poll, which had predicted a reading of 51.9. "The (European) data was quite negative but I think the euro has stabilized for now and we see it heading up to $1.12 versus the dollar in the coming months," said Manuel Oliveri, an FX strategist at Credit Agricole in London. The euro was up 0.11% at $1.1003. The pound was up 0.36% against the dollar.

Copyright Reuters, 2019