By: Barbara Zigah
The U.S. Dollar slipped from a 2-week peak versus the Japanese Yen in Asian trading today, but is expected to more than recoup those losses on speculation that the U.S. Federal Reserve Bank will reaffirm that no further easing is likely in the near term. As reported at 2:28 p.m. (JST) in Tokyo, the U.S. Dollar lost 0.2% against the Yen, trading at 77.30 Yen; overnight, it had struck a 2-week high of 77.70 Yen. It was only a week ago that the Yen struck a fresh record low, which investors worried would result in another intervention by the Bank of Japan.
The greenback also slipped against the Australian Dollar following what are considered upbeat comments made by the RBA’s governor as to the state of the country’s economy. The Aussie gained 0.4%, trading at $1.0472, but met resistance at $1.0499, the 21-day moving average.
Traders will likely be cautiously conservative in trades involving the U.S. Dollar until the conclusion of the Ben Bernanke speech later today. Markets had original factored in the possibility of more stimulus to be forthcoming, but the outlook has reversed; investors further believe that the Fed will downplay recessionary risks. One strategist in Paris believes that the Fed will reconfirm its commitment to low interest rates, which in itself, will be enough to send the greenback downtrending.