The U.S. Dollar Index edged higher after comments made by two officials of the Federal Reserve Bank helped to underpin the currency and kept expectations alive that the U.S. central bank will begin to tighten monetary policy by the second quarter of 2015. In contrast, officials at the Bank of Japan and the European Central Bank continue to work towards staving off a lengthy deflationary trend. Analysts point out that the divergence of policy among the Fed and the BOJ and ECB are likely to continue to support the greenback and weigh against the Yen and Euro, respectively.
The U.S. Dollar Index was trading at 88.231 .DXY, a rise of 0.3%. The USD/JPY was higher at 118.8550 Yen, a gain of 0.48% while the EUR/JPY was 147.8437 Yen, a rise of 0.20%. The EUR/USD was trading lower at $1.2439, a loss of 0.28%.
Commodity Currencies Slide on Global Sell Off
In the meantime, commodity-linked currencies were under some pressure on a sell-off in global commodities. The AUD/USD pair was trading lower at 0.8461, a loss of 0.37%. Analysts point out that the Aussie Dollar did get some support from comments made by officials of the Reserve Bank of Australia when the most recent policy review was published which showed that the RBA remains hawkish and left interest rates unchanged.