Tags: Dollar | Bernanke | Fed | Minutes

Dollar Gains Ahead of Bernanke Speech, Fed Minutes

Tuesday, 09 Jul 2013 07:17 PM

The dollar Tuesday advanced against most major currencies as markets anticipated fresh insights on the Federal Reserve's stimulus tapering plans coming Wednesday.

The dollar's gains came ahead of Wednesday's release of the minutes from the June Federal Open Market Committee policy meeting and a speech by Fed Chairman Ben Bernanke in Boston.

Markets have for weeks intensely focused on when the Fed will taper its $85 billion-a-month bond-buying program. In June, Bernanke signaled the program would likely be scaled down beginning in the next few months, if economic conditions support it.

"For the FOMC minutes to drive the dollar sharply higher, we need it to show significant support for tapering in September," said Kathy Lien, managing director of BK Asset Management.

Lien said the Fed's only remaining chances to scale back the policy are at the Fed's September or December meetings, where Bernanke will have the opportunity to explain the shift at a news conference.

"If the Fed believed that the economy could handle it, they would much rather taper for the first time in September than December because the December meeting is too close to the holidays," Lien said.

Late in the day, the euro bought $1.2787, down from $1.2868 late Monday.

The euro was hit by comments from Jorg Asmussen, a member of the executive board of the European Central Bank, who was quoted as saying the ECB may keep interest rates low for more than a year.

"The outlook for continued easy monetary policy from the ECB for over a year, contrasts with expectations for the Fed to begin removing policy accommodation, possibly as early as September," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

The euro was also buffeted by a ratings downgrade by Standard and Poor's of Italy based on its weak economic outlook. S&P has a "negative" outlook on the country.

 The dollar also rose to 101.11 yen compared with 100.99 late Monday.

The euro dropped to 129.29 yen from 129.96.

The dollar also gained on the British pound and the Swiss franc.

The pound sank to $1.4866 compared with $1.4950 late Monday.

The dollar rose to 0.9730 Swiss franc from 0.9634.

© AFP 2017

 
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The dollar Tuesday advanced against most major currencies as markets anticipated fresh insights on the Federal Reserve's stimulus tapering plans coming Wednesday.
Dollar,Bernanke,Fed,Minutes
360
2013-17-09
Tuesday, 09 Jul 2013 07:17 PM
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