Subscribe

  • Subscribe

Dollar falls amid speculation over Fed

Posted by | June 14, 2013 .

NEW YORK (AFP) – The dollar weakened against other major currencies Thursday after positive US economic retail and jobs data fueled further speculation over the Federal Reserve’s plans for its stimulus.

The euro bought $1.3372 around 2100 GMT, up from $1.3337 at the same time Wednesday.

Both currencies fell against the Japanese currency, which surged after a sharp Asian sell-off in equities, including Japan’s Nikkei plunging 6.4 percent into bear territory.

The dollar fell to 95.31 yen from 95.94 yen late Wednesday, managing to claw back some earlier losses. The euro dropped to 127.48 yen from 127.97 yen.

Better-than-expected US economic news left market participants still uncertain over whether the Federal Reserve could begin to curb its $85 billion monthly asset-purchase program.

US retail sales picked up in May, a positive sign for consumer spending that accounts for most of the economy’s activity.

Claims for unemployment insurance benefits fell in the first week of June, pointing to a continued but slow recovery in the jobs market.

Despite the positive indicators, US bond prices rose and yields fell, suggesting bond investors were not completely convinced the Fed was ready to switch gears.

”Overall, this feeds neatly into the idea of reducing QE3 by the Federal Reserve next week, although these data today more or less brings the likelihood back to even on whether or not the reduction occurs,” said Christopher Vecchio of DailyFX.

The central bank opens a two-day monetary policy meeting next Tuesday.

The pound rose to $1.5717 from $1.5678 late Wednesday.

The greenback also slid against the Swiss franc, to 0.9215 from 0.9206.

Share and Enjoy

  • Facebook
  • Twitter
  • Delicious
  • LinkedIn
  • StumbleUpon
  • Add to favorites
  • Email
  • RSS
Tags: , , , , , , , , , , , , , , , , ,