By: Barbara Zigah
The U.S. Dollar remains broadly defensive ahead of today’s expected quantitative easing announcement by the Federal Reserve’s FOMC, and until that decision is announced at 6:15 p.m. (GMT), market players remain cautious.
In overnight trading, the U.S. Dollar got some support from the media following reports that the U.S. House of Representatives would be controlled by the Republic party with U.S. voters sending a clear signal to the Obama administration that they are unhappy with the current state of the American economy.
As reported at 4:18 p.m. (EST) in Sydney, the U.S. Dollar held steady against the Japanese Yen, trading at 80.65 Yen, and not far off 79.75 Yen, the record low which was set in 1995. Against the Euro, the greenback was trading at $1.4016, off from late New York trading of $1.4038.
The Australian Dollar, which yesterday surged to a 28-year peak of $1.0025 following the RBA’s surprise rate hike announcement, slipped back below parity to $0.9974 While markets have essentially priced in the anticipated Fed action, uncertainty remains as to the size and pace of the expected bond puchases. An amount larger than expected will put additional pressure on the U.S. currency.