Dollar hushed ahead of FOMC The dollar was fairly muted at the start of the week while the yen pulled away from a five-year low as forex investors assess whether the Federal Reserve will begin tapering stimulus. Forex traders trimmed massive short-yen positions ahead of the Fed’s December 17-18 FOMC meeting. Asian shares opened the week on a sour note with markets nervous over the fate of US policy. The Nikkei was down more than 1.50 percent. European shares were also expected to open lower. Expectations that Federal Reserve will scale back on its record bond buying program mounted ahead of the meeting. USD/JPY eased to 102.64 after hitting a five-year peak of 103.92 on Friday. The Dollar Index (DXY) eased to just above 80 on Monday, after inching closer to 80.50 on Friday, with EUR/USD bouncing back to 1.3761 earlier in the session. Meanwhile, the euro hit a fresh monthly high against sterling before flash manufacturing and services data from the euro area. EUR/GBP inched higher to 0.8443. Over in Asia, Chinese preliminary factory manufacturing activity data fell just short of expectations in December at 50.5 versus 50.9. Despite the figure was less inspiring, the Aussie held its ground and managed to stir clear of a three and a half month trough hit last Friday against the greenback. AUD/USD traded around 0.8950 by the time of writing.
Posted on: Mon, 16 Dec 2013 09:07:10 +0000
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