The U.S. dollar’s advance may be held in check by the Federal Reserve’s decision to continue keeping the interest rates low on signs that the inflation slowdown will continue for some time and the risk of increasing the borrowing costs too soon before the economy fully recovers.
The Fed lowered its 2010 and 2011 inflation forecasts, excluding food and energy (their estimations were already below 2009 levels). Yet the Fed officials are still looking for evidences of a robust recovery from the economic recession and they are ready to take any action needed to keep inflation under control. From the Fed officials’ point of view the high unemployment and the tight credit are putting restraint on the economic rebound.
USD/JPY traded at 93.97 as of 9:45 GMT after it opened at 93.78 today. USD/CAD traded near 0.9986 down form the opening level of 1.0017.
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