News Column

Dollar Index Rises Ahead of Fed Comments

September 24, 2013 Financial Markets


The dollar index soared on Tuesday ahead of comments from Fed members later in the day, amid speculations the Fed may still taper its stimulus before the end of this year.

New York Fed President William Dudley said on Monday that the Fed still could cut its non-standard measures later this year, while later in the day Fed Bank of Cleveland President Sandra Pianalto will speak at 08:30 a.m. local time Fed and Bank of Kansas President Esther George will speak at a conference thereafter.

Speculations are now rising that if U.S. data showed progress the Fed could start unwinding its monthly bond purchases next month or at least in December. Hence, investors focus will remain on U.S. data to get clues about the Fed plan to withdraw stimulus after last week's disappointing delay.

As of 14:00 GMT, eyes will track U.S. consumer confidence which may show a slide to 80.0 in September from 81.5 in August.

The dollar index, which tracks the greenback's movements versus a basket of six major currencies, climbed to a high of 80.73 from a low of 80.19. Against the euro, the dollar showed advance for a second day to push the pair down to a low of 1.3463 from a high of 1.3517. A report released today from Germany showed that business confidence edged up for a fifth straight month in September, yet missed analysts' forecast.

IFO business climate edged up to 107.7 in September from a revised of 107.6 in August, yet it came below analysts' projection of 108.0.

The euro is still affected by ECB President Mario Draghi's comments yesterday which referred to the possibility of launching another round of cheap loans to banks if needed. Also, the dollar advanced against the pound to take the pair down to 1.5961, compared with the session's opening of 1.6040.

The USDJPY, however, fell for a third consecutive session to set a low of 98.49 from a high of 98.49, where it found support at 98.60 as it represents Daily SMA 50.

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Original headline: Dollar index rises ahead of comments from Fed members

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