Dollar steady ahead of Fed interest rate decision
Wednesday, 12 December 2007
TOKYO, Dec 11 (AFP): The dollar was steady in Asian trade today as investors hunkered down ahead of a key interest rate decision from the US Federal Reserve, dealers said.
The dollar was flat at 111.70 yen in Tokyo afternoon trade from New York late Monday.
The euro firmed to 1.4727 dollars from 1.4712 dollars and to 164.47 yen from 164.33.
All eyes where turned to a Federal Reserve meeting due to start later Tuesday when the US central bank is expected to cut its key interest rate by at least 25 basis points from a current level of 4.50 per cent, dealers said.
But analysts warned that another dose of the Fed's monetary medicine would not cure the US economy's ills overnight.
While a 25-basis-point cut is seen as the most likely outcome of the Fed meeting after last week's robust non-farm payrolls data and some stronger than expected housing data Monday, a 50-basis-point cut remains possible as the Fed tries to fend off signs of a severe economic slowdown, dealers said.
"Another rate cut is virtually a done deal, but the size of the cut and the language of the statement are still uncertain," said currency strategists at the Commonwealth Bank of Australia in a note to clients.
The Fed has already reduced borrowing costs twice since September in a bid to underpin economic momentum and is expected to act again amid a protracted housing slump and tighter global credit conditions, they said.
The dollar was flat at 111.70 yen in Tokyo afternoon trade from New York late Monday.
The euro firmed to 1.4727 dollars from 1.4712 dollars and to 164.47 yen from 164.33.
All eyes where turned to a Federal Reserve meeting due to start later Tuesday when the US central bank is expected to cut its key interest rate by at least 25 basis points from a current level of 4.50 per cent, dealers said.
But analysts warned that another dose of the Fed's monetary medicine would not cure the US economy's ills overnight.
While a 25-basis-point cut is seen as the most likely outcome of the Fed meeting after last week's robust non-farm payrolls data and some stronger than expected housing data Monday, a 50-basis-point cut remains possible as the Fed tries to fend off signs of a severe economic slowdown, dealers said.
"Another rate cut is virtually a done deal, but the size of the cut and the language of the statement are still uncertain," said currency strategists at the Commonwealth Bank of Australia in a note to clients.
The Fed has already reduced borrowing costs twice since September in a bid to underpin economic momentum and is expected to act again amid a protracted housing slump and tighter global credit conditions, they said.