The U.S. currency slashed previous gains in the beginning of the Asian trading session today as speculations suggested that interest rates will be maintained at record lows for an extended period of time in the United Stated, indicating that the economy will need further stimulus to surpass the recession.
Federal Reserve officials are likely to state today that interest rates in the United States will remain low for an undetermined amount of time, according to speculations, causing the dollar do lose against most of the 16 main traded currencies. A part from speculative moments regarding delays in rate hikes, optimism in Asian stocks fueled by forecasts suggesting that fewer jobs were cut in the United States, increased risk appetite and brought investors back to riskier positions, after a positive beginning of the week for the greenback as pessimism influenced market sentiment since Monday.
Analysts opinion regarding interest rates in the United States indicate that they are unlikely to be changed before next summer, a period that can be considered long, taking into account eventual rate hikes before the end of this year as expected in Australia for example. The crisis was deeper in the U.S. than several other economic regions throughout the world, and a longer recovery can be expected, this is weighing on the dollar’s outlook today.
EUR/USD traded at 1.4628 as of 6:12 GMT after touching 1.4527 hours earlier. USD/JPY traded at 89.75 from 90.41.
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