As equities in Asia continue to slide the U.S. Dollar was able to recoup some of the ground lost earlier against the safe haven Japanese Yen but still remains close to 6-month trough versus the common currency Euro. Analysts say that investors are waiting for the release of the Federal Reserve minutes tomorrow to try and better ascertain monetary policy direction. Many expect that the Fed will start to taper its asset purchase program next month, a move that, although positive for the greenback, can nonetheless increase appetite for other safe haven currencies including the Swiss Franc and the Japanese Yen. At the same time, analysts expect the Fed to at least hint at the possibility of raising interest rates in the mid-term.
The USD/JPY pair traded at 97.35 Yen, a gain of 0.1% and moving off of yesterday’s 1-week trough of 96.88 Yen. The USD/CHF pair had fallen to 0.9145 Swiss Francs during Tuesday trading but had edged higher more recently to 0.9168. The EUR/USD had traded higher at $1.3452 on Tuesday, a fresh 6-month high, but has since slipped back to $1.3419. The U.S. Dollar Index which measures the greenback’s relative weight against a weighted basket of peers, traded slightly up at 80.941 .DXY.