Euro Gets Reprieve from Fed Minutes

The Euro continues to hover close to a 2-month trough against the U.S. Dollar, but at least was able to stop a 5-day long losing streak. The Euro found support after the release of the U.S. Federal Reserve minutes indicated that there would likely be more bond purchases next year which will serve to keep the U.S. currency’s value down. Decoupling from other high-risk currencies, the Euro also managed to avoid the risk averse crowd.

According to the U.S. Federal Reserve’s minutes from its October meeting, several board members felt that the central bank would likely have to intercede with additional bond purchases next year to fill in the gap left after the expiration of the Operation Twist program.

As reported at 10:45 a.m. (JST) in Tokyo the EUR/USD pair was trading at $1.2730, rebounding from the low of $1.2661 struck on Tuesday; since mid-October, the EUR/USD pair has lost 3.6% and been on a constant decline from the $1.31 peak then. The Aussie Dollar slipped 0.2% during the early hours of the Asian session, striking a 10-day trough at $1.0352; meanwhile the Canadian Dollar traded at C$1.0043, a 3-month trough against the greenback. The commodity-linked currencies were negatively impacted by President Barack Obama’s reiteration of his promise to raise taxes on the richest Americans.