Forex »

US dollar steady post-FOMC

Share on StockTwits
Published on
US dollar steady post-FOMC

The US dollar ended the week on a surprisingly steady note as risk-off investors weigh the likelihood of a Federal Reserve bond taper next month. Fed Bank of St. Louis President James Bullard indicated Friday the US central bank could begin tapering its monthly asset purchases as early as next month. On Wednesday Fed Chairman Ben Bernanke surprised the markets by announcing the current pace of monetary stimulus would be left unchanged.

The dollar index held steady above the 80 mark, gaining more than 0.1 percent to 80.46. The greenback was off from an earlier high of 80.57. The US dollar has retraced around half of the losses it incurred following the post-FOMC selloff.

In addition to Bullard’s comments, the US dollar was supported by risk-averse traders grappling with the federal government debt situation. The federal government is at risk of shutting down October 1 if Republicans and Democrats in the House of Representatives fail to reach an agreement to raise the debt ceiling or find an alternative method to fund the government. A failure to raise the borrowing cap could force the Treasury to default on the nation’s $16.7 trillion debt.

The greenback was left treading water in Europe, as momentum builds for the euro ahead of Germany’s weekend elections. The British pound was moderately supported after public sector net borrowing rose less than expected last month.

Elsewhere, the US dollar outperformed its northern counterpart, the loonie, after Canada released mostly in-line consumer inflation data. The greenback was also fractionally higher against the yen, but remained firmly capped below the psychological 100 level.

Next week features the release of several batches of economic data from the United States, including retail sales, durable goods orders and consumer confidence. Regional Fed presidents are also expected to chime in about the central bank’s latest decision to keep the pace of asset purchases unchanged.

Share on StockTwits

What others are reading on Finances

Sorry. No data so far.

Iron FX 1.11156/1.11128 2.8
XM Markets 1.09948/1.09928 2
FxPro 1.10184/1.10171 1.3
FXCM 1.13943/1.13912 3.1