Dollar Recovers, Remains Vulnerable

The US dollar recovered a bit today after yesterday’s losses, but still remained soft amid speculations that the Federal Reserve may reduce its asset purchase program.
Speeches of the Federal Reserve members will be the major theme of this week as market participants wait for signs of changes to monetary policy. On one hand, there are plenty of talks that the Fed will scale back its stimulus measures. On the other, last week’s data did not provide evidences that the economy is robust enough to survive without accommodative policy.
The Dollar Index declined 0.6 percent to 83.736 yesterday. The gauge has climbed to 84.371 on May 17, the highest level since July 2010.
EUR/USD traded at 1.2878 as if 1:16 GMT today after rising from 1.2841 to 1.2881. GBP/USD dropped from 1.5253 to 1.5233. USD/JPY went up from 102.25 to 102.69.

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