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Dollar slides on Fed outlook

Currencies Direct November 19th 2013 - < 1 minute read

The dollar was on the defensive on Tuesday (November 19th) as
speculation mounts the Federal Reserve will maintain stimulus well
into next year.

Improved risk appetite following Beijing’s announcement of
sweeping reforms in China also pressed the greenback.

USD/JPY slid over 0.1 per cent to 99.85, while the dollar
remained on the back foot against the euro,
with EUR/USD rising 0.1 per cent to 1.3524.

Sterling remained supported, with the GBP/USD 
exchange rate
holding firm near recent highs at 1.6111.

The big gainer in Tuesday’s Asian session, however, was the
Australian dollar, which soared 0.6 per cent against its US
counterpart.

AUD/USD hit 0.9430 despite minutes from the Reserve Bank of
Australia latest meeting showing it could loosen monetary policy
further.

Minutes from the Fed’s October meeting are in sharp focus this
week as currency exchange markets eye a possible exit from the
bank’s massive stimulus.

Dovish comments from Fed chair nominee
Janet Yellen have put pressure on the greenback,
cementing the view that the bank will maintain its $85
billion-a-month asset purchase programme well into 2014.

But a hawkish statement from New York Fed president
William Dudley, citing improved growth and labour market
conditions in the third quarter, held the dollar’s losses in check
and suggested policymakers are split over when to dial back
stimulus.

Written by
Currencies Direct

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