US dollar index moved off a recent low as the greenback begins showing signs of strength against its major counterparts. With earlier losses pared and the dollar up on the day, speculation about what’s next is running wild.
US dollar bounced off recent lows against its major counterparts today, heading higher and bringing the dollar index up. Forex traders are waiting with interest as the Federal Reserve’s Federal Open Market Committee begins a two-day meeting today.
Traders are interested to know what policy decisions will come out of this meeting. There is interest in whether or not the Fed will set a timeline for tapering its asset purchase program. With stronger economic data, there is the possibility that the easing efforts underway might be pulled back a bit. However, the dollar’s strength might be overplayed if policymakers indicate that quantitative easing is still needed to support the economy.
Also of interest is the fact that President Obama has said he won’t reappoint Ben Bernanke as Federal Reserve Chair. This has speculation going as to who might be the successor. One of the front-runners, the current Vice Chair, Janet Yellen, is likely to be watched for her comments.
At 14:30 GMT US dollar index is up to 81.8310 from the open at 81.6850. EUR/USD is down to 1.3242 from the open at 1.3264. GBP/USD is down to 1.5257 from the open at 1.5340.
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