Published: 30 Oct at 3 PM Tags: Euro, Dollar, America, Eurozone, Canadian Dollar, USA, Canada, Germany,
The two-day Federal Open Market Committee Policy meeting is almost over, and with the policy statement looming the US Dollar is fluctuating against several of its most traded peers.
Although the Fed is expected to maintain the current level of asset purchases and refrain from making any committing remarks regarding a timeline for tapering asset purchases, speculation saw the â€˜Greenbackâ€™ gain against rivals like the Yen and the Euro overnight before losing ground during the European session.
The FOMC is not expected to provide revised economic forecasts and itâ€™s believed that Chairman Ben Bernanke wonâ€™t hold a news conference.
In the words of one London-based currency strategist; â€˜With expectations having settled on March or April for the start of tapering, thereâ€™s little reason for the Fed to stick its neck out today. The bulk of currency managersâ€™ positioning is still located in long Dollar-Yen positions. That doesnâ€™t mean those positions have to unwind, but that is a risk as we get to year-end.â€™
While currency movement was a little limited ahead of todayâ€™s major US developments, the Euro did experience modest fluctuations as a result of a mixed bag of economic data for the Eurozone. Separate reports showed that Spain
exited recession while German unemployment increased and Eurozone consumer confidence climbed.
While the Canadian Dollar slumped to a two-month low against its US counterpart yesterday in response to Bank of Canada
Governor Stephen Poloz commenting on the central bankâ€™s change of focus in its recent policy statement, the â€˜Loonieâ€™ recovered ground during the local session.
An ADP Research Institute report showing that US companies added fewer positions than expected in October also boosted the CAD/USD pairing.
As New-York based foreign-exchange strategist Sebastien Galy observed; â€˜Weaker ADP is helping to weaken the Dollar, itâ€™s all algorithmic trading as macro investors are unlikely to be very-much surprised. Whatever happens to the Canadian Dollar now, itâ€™s starting to be time to consider building bearish positions for the move lower in the next few months.â€™
With the Fed delivering its decision at 18:00 GMT currency market volatility can be expected to occur overnight.
As of Wednesday, 30th October 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1677, GBP USD exchange rate was 1.6025, and GBP CAD exchange rate was 1.6795.