A sluggish day for the Aussie dollar and commodities is seen as the US dollar appreciated with the better-than-expected results of consumer confidence survey and home sales picking up at this time.

As of 4 p.m. in New York, the Standard & Poor's 500 Index lost 0.3 percent to 1,182.45 while the Dollar Index rose 0.5 percent.

Commodities, on the other hand, reacted and fell with the Thomson Reuters/Jefferies CRB Index of commodities declining 0.7 percent as cotton retreated from a record high.

Analysts said this is in reaction to the speculation that the Federal Reserve's strategy of quantitative easing will instead be gradual to gauge its effects to the US economy.

Federal Reserve

The Wall Street Journal reported that the Fed might limit its plan in purchasing bonds in order to establish and further adjust over time.

In a related Bloomberg data, estimates for the size of the US government's quantitative easing is "$1 trillion at Bank of America-Merrill Lynch Global Research to $2 trillion at Goldman Sachs Group Inc., with economists at both firms agreeing the Fed will likely begin with a $500 billion plan after the Nov. 2-3 meeting."

An analyst from Macquarie Bank based in Sydney said the currency and bonds markets would need to take this new strategy of the Federal Reserve in stride before it can fully adjust, noting that commodity-based currencies like the Australian and Canadian dollars will take a beating in the meantime.