Greenback recovers ahead of Fed meeting

Currencies Direct January 28th 2014 - < 1 minute read

The dollar has gained a foothold against the yen in Asian trade
this morning (January 28th) as markets look ahead to the next
policy meeting of the US Federal Reserve.

After stooping as low as 101.77 yen in Monday’s sessions – the
worst exchange
rate
 since early December – the greenback has edged up 0.1
per cent to 102.63 yen.

Investors are hoping the Fed will announce further tapering of
its vast asset purchase plan, as news of recovery in the world’s
largest economy continues to emerge.

Richmond Federal Reserve President 
Jeffrey Lacker
 has suggested that the Fed may consider
cutting another $10 billion from the nation’s huge asset purchase
programme, which could give the dollar a considerable boost in
currency markets.

But with confidence returning to the US, it is feared that
traders will lose interest in emerging markets, which offer higher
yields but come with greater risk.

Currencies in many of these nations are suffering mounting
pressure as a result, although many are not helped by circumstances
at home. After the lira collapsed last week, it is likely that
Turkey’s central bank meeting on Tuesday will be closely
watched.

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Written by
Currencies Direct

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