Easing uncertainty pushes dollar lower
Friday, 29 October 2010
LONDON, Oct 28 (Internet): Speculation over the size and the possible impact of further US quantitative easing next week pushed the dollar a little lower Thursday.
The euro and yen also retreated from earlier highs amid concerns over a possible split among European Union heads of state, who will meet later in the day, and the Bank of Japan's decision to bring forward its next policy meeting.
The dollar recently traded down at 81.33 yen from 81.71 late Wednesday in New York, but it was up from an earlier low of 81.22 yen. The euro changed hands for $1.3821, up from $1.3768, but was hardly changed against the yen at 112.44 from 112.49. The pound managed to climb a little to $1.5786 from $1.5765, despite a report from Nationwide showing that U.K. house prices fell 0.7 per cent this month.
The market has now largely discounted that the US Federal Reserve will introduce a more limited amount of quantitative easing next Wednesday. But there is still a question over whether the central bank will announce a finite amount of easing or whether it will be left open-ended, with liquidity being provided as needed in the months to come.
The dollar is also being undermined by uncertainty over how investors will react to the news. While some analysts believe the Fed's move has been largely priced in, others remain adamant that the US currency will suffer as long as policy is eased further.
The euro and yen also retreated from earlier highs amid concerns over a possible split among European Union heads of state, who will meet later in the day, and the Bank of Japan's decision to bring forward its next policy meeting.
The dollar recently traded down at 81.33 yen from 81.71 late Wednesday in New York, but it was up from an earlier low of 81.22 yen. The euro changed hands for $1.3821, up from $1.3768, but was hardly changed against the yen at 112.44 from 112.49. The pound managed to climb a little to $1.5786 from $1.5765, despite a report from Nationwide showing that U.K. house prices fell 0.7 per cent this month.
The market has now largely discounted that the US Federal Reserve will introduce a more limited amount of quantitative easing next Wednesday. But there is still a question over whether the central bank will announce a finite amount of easing or whether it will be left open-ended, with liquidity being provided as needed in the months to come.
The dollar is also being undermined by uncertainty over how investors will react to the news. While some analysts believe the Fed's move has been largely priced in, others remain adamant that the US currency will suffer as long as policy is eased further.