US dollar steady ahead of Fed meeting

Published: 28 Oct at 9 AM Tags: Euro, Dollar,

The US dollar is holding steady ahead of a Federal Reserve policy meeting later in the week. Last week the dollar fell to its lowest level against the euro in two years. It is widely expected that the Fed will maintain its $85 million bond buying programme until at least the end of the year, something that could keep pressure on the greenback.

Investors are keeping a close eye on developments in China’s money market and also on economic data coming out of the US. Any scaling back of quantitative easing by the Fed will be dependent on strong indications that the US economy is well and truly on the road to recovery.

After hitting a high of $1.3832 last Friday, the euro is currently settled at $1.3805. The single currency is managing to hold its own even though there was some disappointing business sentiment data released by Germany, the region’s largest economy.

The dollar is up 0.2 per cent against the yen and is currently trading at 97.55 yen. On Friday the dollar hit its lowest level in two weeks against the Japanese currency of 96.92 yen.

It is likely that a policy meeting later in the week at the Bank of Japan will result in an announcement that the central bank will continue with its easy money programme.