US dollar is gaining ground today as speculation about the upcoming Federal Reserve meeting runs rampant. For now, the greenback is higher against most of its major counterparts on the speculation that Ben Bernanke will provide a clearer idea of when the “taper” will begin.
What happens with the US dollar in the future likely depends on the outcome of this week’s Federal Reserve meeting. The Federal Open Market Committee will meet for two days, and discuss the fate of the stimulus program that has been in place.
At issue is when the “taper” will begin. When will the Federal Reserve begin tapering off its efforts? If the bond buying program is set to end sooner rather than later, that could provide a boost for the US dollar. However, if the Fed decides to keep the program going longer, due to concerns about a flagging US economic recovery, the continued easing could weigh on the greenback.
For the most part, many currency pairs are rangebound for now. Forex traders want to see what Ben Bernanke has to say on Wednesday. With little else to occupy traders, the central bank policy in the United States is front and center.
At 16:51 GMT EUR/USD is down to 1.3333 from the open at 1.3348. GBP/USD is down to 1.5602 from the open at 1.5731. USD/JPY is up to 94.9020 from the open at 94.1715.
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