The U.S. Dollar was broadly higher as FX traders wait for some guidance from the Federal Reserve Bank specifically as regards the possible timing of its next rate hike and the steps it will take toward normalize the current and historical ultra loose policy. Later today, the FOMC will be releasing its statement after which the Fed chief, Janet Yellen, will hold the obligatory press conference; it is there that investors will have the best opportunity to glean what might be the Fed’s future direction though the Wall Street Journal yesterday spooked investors by saying that the Fed might include specific wording, “considerable time” in its language, an indication that a rate increase could be farther away than anticipated.
As reported at 8:53 a.m. (BST) in London, the EUR/USD was trading at 1.2964, just shy of the day’s high but within a relatively tight trading band. Meanwhile the USD/JPY was up at 107.3350 Yen, near midpoint of the day’s trading range; earlier the Dollar had edged beyond last Friday’s 6-year high breaking through at 107.40 Yen. The AUD/USD was lower at 0.9064, just off the session low.
Aussie Recovers on PBOC News
The Aussie Dollar had earlier managed to rally against the greenback, gaining almost 1% to a peak of $0.9112 before falling back. Over the past week, the Aussie had lost nearly 4% on data which showed that China’s growth was declining, with lowered future forecasts. However, it was reported that the Peoples Bank of China would be providing additional liquidity to key banks in order to boost lending in the country.