The US Dollar edged away from a recently struck 2-week peak as investors await the outcome of the Federal Reserve Bank policy meeting which is set for later this week. A rise in oil prices also gave commodity-linked currencies like the Aussie and Kiwi Dollars, as well as the Canadian Loonie, a boost as speculation grows over possible OPEC production controls. Besides the Fed’s, investors are also awaiting news from the Banks of England and Japan as well as the Swiss National Bank.
As reported at 10:36 am (BST) in London, the EUR/USD was trading at $1.1168, up 0.10% while the GBP/USD was up by 0.35% at $1.3042. The USD/JPY was down 0.36% to 1.10190 Yen. The AUD/USD was higher at $0.7546, a gain of 0.60% for the Aussie while the NZD/USD was higher at $0.7311, up 0.6141%. The USD/CAD was trading at C$1.3156, down 0.3922%.
Fed Could Now Surprise
Though the markets’ expectations were that the Fed would hold off on a rate hike for 2016 given the cumulative economic data, Friday’s unexpectedly improved inflation data provided some hope that a December rate hike could be on the table. Investors are also anxious to see what the Bank of Japan might do given, as analysts point out, that it appears the BOJ’s policy tools are nearing the peak of usefulness. According to one analyst in Singapore, without a radical surprise, the Japanese Yen is likely to continue to strengthen.