Investors expect little change in Fed policy

Published: 29 Oct at 9 AM Tags: Euro, Dollar,

The US dollar climbed slightly higher today, but is still not far off its lowest level in nearly nine months. Investors are currently waiting to see the results of a meeting at the Federal Reserve, but most are sure that the central bank will be sticking to its massive monetary stimulus programme until next year.

Following a 0.2 per cent rise yesterday, the dollar index is holding firm at 79.344. The dollar is under pressure because of weaker than expected economic data coming out of the US and most investors feel there is a lack of conviction in the market ahead of the Fed’s meeting, due to take place later today and tomorrow.

Manufacturing output during September was barely up and previously owned home sales were at their weakest level in more than three years. However, there are still hopes that the greenback will be able to strengthen if the mood starts to become more positive. Traders are also confident that the dollar will not be hurt too badly as it becomes more evident just how much the recent government shutdown in Washington hurt economic growth.

The euro has been given a boost by the dollar’s poor performance and is currently trading at $1.3788. The dollar gained 0.3 per cent against the yen to 97.66 yen and the euro rose 0.2 per cent on Monday to 134.62 yen.

The Aussie dollar is down to $0.9535 as the Reserve Bank of Australia continues to talk the currency down.