Euro hits six-week peak on banking deal view; dollar falls

DOLLAR DIPS

Traders said investors seemed to have pretty much priced out the risk of the Federal Reserve scaling back monetary policy soon, which might help explain why the dollar has not risen broadly in the past few sessions.

“We had pretty good data for the U.S. last week and that has prompted some to expect tapering in December, but I think that’s not realistic,” said Mizuho’s Harajli. “I think we need to get more information, more data before the Fed can actually decide on that.”

Economists polled by Reuters on Monday expect the Fed will begin reducing its massive bond-buying program in March.

Still, one Fed official has left the door open for a December taper. James Bullard, the St. Louis Fed president, said the Fed could slightly reduce its monthly bond purchases this month in reaction to signs of an improved labor market. The Fed holds its policy meeting next week.

Against the yen, the greenback fell 0.5 percent to 102.76 yen.

One possible concern for yen bears is that support for Japanese Prime Minister Shinzo Abe dropped after he steam-rolled through parliament a tough secrecy act that critics fear could muzzle media and allow officials to hide misdeeds.

(Additional reporting by Anirban Nag in London; Editing by Dan Grebler)

Article Appeared @http://www.reuters.com/article/2013/12/10/us-markets-forex-idUSBRE9AH0UU20131210

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