The U.S. Dollar experienced light trading and little movement during Monday’s trading session in Asia, with investors making the decision to take a wait and see stance to determine what, if anything, the Federal Reserve might do when its policy team meets later this week. Analysts are about evenly divided on what the Fed is likely to do, pointing out that the U.S. labor department has improved in recent months while the risk of another U.S. government stalemate have now diminished; on the flip side, Ben Bernanke, the Fed chief, might himself prefer to wait for additional evidence that recently reported economic improvements are sustainable.
As reported at 12:14 p.m. (JST) in Tokyo, the USD/JPY pair traded at 102.89 Yen, a decline of 0.4% which follows Friday’s 5-year peak at about 104.00 Yen. Analysts say that the Japanese currency continues to feel pressure with the Bank of Japan’s commitment to a low valued Yen. The U.S. Dollar Index lost ground as a result of the recent rebound in the Yen, slipping to 80.09 .DXY, a loss of 0.15%; overall, the Index is getting some support on expectations of an imminent Fed tapering. The EUR/USD traded at $1.3758, slipping from last week’s 2-month high of $1.3811; the pair’s inability to stay above the key $1.3800 level suggests to some currency analysts that the pair is likely to retreat in the near term..
Chinese Report Tanks Aussie
The Australian Dollar edged broadly lower, striking a 3-month low versus the greenback and a 3-year trough against the common currency Euro following the release of the preliminary HSBC report on manufacturing growth in China which showed an unexpected slowdown. The AUD/USD traded at A$0.8945, close to Friday’s trough of A$0.8909 while the EUR/AUD traded at A$1.5371.