By: Barbara Zigah
Speculation exists that a possible rise in the yield of U.S. Treasury instruments may encourage more buybacks of the U.S. Dollar. This past week’s rise in yields in response to the Federal Reserve Bank’s imminent move to add further quantitative easing measures to their arsenal intended to spur the sluggish American economy.
The U.S. Dollar slipped against the Japanese Yen, trading at 81.60 Yen, a decline of .2%, but significantly higher than the 15-year low struck on Monday.
The next meeting of the Federal Reserve’s Open Market Committee will take place November 2nd through 3rd. Investors expect to get more details on the Fed’s plans, including the amount of the scheme, and how the funds will be released into the system, with calls for caution and gradual funding.
A recent poll estimated that anywhere from $80 billion upward to $100 billion might be purchased. In Japan, meanwhile, the central bank there recently announced detailed plans to spur their own deflationary trending economy, which includes an asset purchase scheme; a recent drop in key lending rates to near zero has not been adequate. Their next policy meeting has been rescheduled to next week, given the urgency.