(Bloomberg) — The dollar fell to a two-month low on speculation disappointing economic data will push back the Federal Reserve's first interest-rate increase in nine years.

An index tracking the greenback against major peers declined for a fifth day, the longest streak since July, as a measure of consumer confidence was the latest indicator to trail projections. Policy makers will consider that data as they debate higher borrowing costs at a two-day meeting starting Tuesday.

"Consumer confidence today is not helping the dollar at all," said Omer Esiner, chief market analyst at the currency brokerage Commonwealth Foreign Exchange Inc. in Washington. "If we get that cautiousness from the Fed, if we get that heightened focus on the softness of recent economic data, then I think the dollar goes a little bit lower in the near term."

The Bloomberg Dollar Spot Index slipped 0.7 percent to 1,170.59 at 12:18 p.m. New York time, reaching the lowest level on a closing basis since Feb. 25. It touched 1,222.94 on March 13, the highest in records dating back to 2004.

The U.S. currency weakened 0.8 percent to $1.0977 per euro and slumped 0.2 percent to 118.82 yen.

Market Prices

The greenback is poised to fall in April for the first month since June as the string of worse-than-forecast reports that weighed on first-quarter growth bleeds into April. A consumer-confidence gauge released Tuesday was weaker than the most pessimistic of 77 estimates compiled by Bloomberg, falling this month to its lowest level of the year.

"The data have been consistent with adopting a bit more of a bearish view on the dollar in the short run," Aroop Chatterjee, a New York-based currency strategist at Barclays Plc, said by phone. "These numbers are somewhat noisy and it's hard to extrapolate from single data points. Our view remains that this is more a transitory weakness."

A report Wednesday is forecast to show the U.S. economy grew at the slowest pace in a year. Gross domestic product expanded an annualized 1 percent in the three months through March 31, according to the median estimate of 79 analysts surveyed by Bloomberg.

The U.S. Federal Open Market Committee will release a statement on Wednesday after concluding a two-day meeting. Central-bank policy makers will wait until September to raise borrowing costs, according to 73 percent of 59 economists surveyed by Bloomberg last week. A March survey put liftoff in June or July.

"The last few weeks, people have been downgrading their expectations for monetary policy" in the U.S., said Simon Derrick, chief markets strategist at Bank of New York Mellon Corp. in London. "In a world where we are increasingly sensitive to monetary-policy shifts of any kind, it's not surprising that the dollar comes under pressure. You'd expect to see a dollar pull-back taking place."

The dollar has gained 17 percent during the past 12 months, according to the Bloomberg Correlation-Weighted Index, driven by projections the Fed will raise interest rates this year, while central banks around the global add to monetary stimulus.

–With assistance from Chikako Mogi in Tokyo and Lucy Meakin in London.