The US dollar is strengthening today, thanks in large part to expectations that the Federal Reserve will continue to taper its asset purchase program. With the US economy mostly on the upswing, and unemployment at a more reasonable level, many think that the Fed will continue to cut its quantitative easing efforts.
Today is the second day of a two-day meeting of the Federal Open Market Committee. It’s the last meeting being held under the leadership of Ben Bernanke, and there are high expectations for the decision that will be announced.
Many expect that the Fed will announce that it is moving forward with the taper, reducing its asset purchases. With unemployment at a manageable level, and with the US economy improving, the need for quantitative easing has been reduced by quite a bit, and there are expectations that the dollar will strengthen as the Fed continues to work with the taper.
Indeed, the US dollar is higher against major counterparts today, even though the dollar index itself is lower.
At 14:48 GMT the US dollar index is down to 80.4640 from the open at 80.6350. EUR/USD is down to 1.3617 from the open at 1.3670. GBP/USD is down to 1.6536 from the open at 1.6582. USD/JPY is down to 102.4000 from the open at 102.8655.
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