The U.S. Dollar Index edged up to a briefly strike a 1-week peak as investors await the Fed’s decision regarding monetary policy and QE tapering. Currency strategists says that the greenback was seeing major short moves ahead of the 2-day policy meeting as the consensus opinion is that the Fed will continue its $85 billion monthly bond buying scheme at least until the first quarter of next year. BNP Paribas analysts confirmed investors’ thinking, saying that the greenback’s value deteriorated after every Fed meeting this year and they don’t expect any surprises this time around though they believe that market players are better prepared for the likelihood.
As reported at 11:33 a.m. (JST) in Tokyo, the U.S. Dollar Index traded at 79.648 .DXY, a gain of 0.1% and just off the session peak of 79.692 .DXY, a fresh 1-week high; less than a week ago, the Index had been trading close to a 9-month trough. The EUR/USD is trading steadily at $1.3741, sliding from a recently struck 23-month high of $1.3833; strategists point out that the inability to break clean above the key $1.3800 level has made it susceptible to corrections. The USD/JPY was also trading steadily at 98.17 Japanese Yen, pips away from Tuesday’s 1-week peak of 98.28 Japanese Yen.
Look Ahead to Jobs Data
Currency analysts don’t believe that market players intend to go long anytime soon given the widespread uncertainty over the U.S. economic situation and given the 16-day federal government shutdown which is certain to impact growth. Markets will look to ADP’s release of private sector jobs data for October which is generally viewed as a precursor to the government’s own labor statistics which will be released on November 8th.