By: Barbara Zigah
In Asian trading today, the U.S. Dollar slipped broadly lower as markets ponder the likely outcome of today’s Federal Open Market Committee Meeting. As reported at 3:39 p.m. (JST) in Tokyo, the greenback traded against the Australian Dollar at $1.0853, the lowest trade in 29 years. While against the safe haven Swiss Franc, the U.S. Dollar dropped to a record low 0.8669 Swiss Francs. The U.S. Dollar Index, which measures the greenback’s strength vis-à-vis a weighted basket of major currencies, touched on a 3-year low of 73.493 .DXY earlier and traders expect that the record low of 70.698 .DXY is likely soon to be struck.
The majority of market players are speculating that the Federal Reserve’s current loose monetary policy will continue for the near term as the Fed works to revive the U.S. economy. What is of paramount concern to markets and analysts alike is how the Fed will exit their current quantitative easing scheme, which is scheduled to conclude at the end of this quarter. Fiscal problems in the U.S. are also playing a role in the greenback’s weakening, with a significant budget deficit and a debt ceiling that is likely to be hit as soon as next month.
Meanwhile, the common currency Euro continues to benefit from decisive and aggressive monetary policy in the Eurozone, even as troubled member nations there continue to struggle with debt. Earlier, the Euro was trading higher against the U.S. Dollar at $1.4715, breaking through the $1.47 barrier established in December 2009.