Dollar bounces back after Fed meeting

Published: 22 Aug at 9 AM Tags: Euro, Dollar,

The US dollar has bounced back after minutes of a Federal Reserve policy meeting suggest that the central bank is on track to reel in its bond buying programme as soon as next month. The greenback was also given a boost after manufacturing figures from China indicated growth during August.

After a high of 98.33 yen the dollar settled at 98.16 yen, 0.5 per cent up on the previous day. The positive data from China also helped to give that Australian dollar a much needed boost against the yen.

An increase in Treasury yields has made dollar priced assets more attractive to investors. The greenback is also up 0.1 per cent against the euro. The single currency is currently worth $1.3336. The Aussie is up 0.6 per cent against its Japanese counterpart at 88.10 yen and holding steady at $0.8977 following a low of $0.8932.

Minutes released by the Fed show that Federal Open Market Committee members are divided on when the tapering of the bank’s easy money policy should begin, but this has not stopped most analysts predicting that it will start in September.

The focus is now on nonfarm payroll data for August due out on 6 September. If the figures are positive, then they may encourage the Fed to go ahead with a reeling in of quantitative easing.