The US dollar held steady today, rising a little against the Japanese yen, as traders were speculating about possible actions of US policy makers and about geopolitical risks that are driving the Forex market right now.
The dollar has the same supportive factor as the UK sterling — the interest rates outlook. While the Federal Reserve was making attempts to downplay rate hike expectations, most market participants believe that the central bank will tighten its monetary policy in not-so-distant future. The inflation report that will be released today should give hints about the performance of the US economy, which in turn may help to asses future actions of the Fed.
The greenback also received support from risk aversion caused by tensions in Eastern Europe and Middle East. Yet gains were limited, and the currency was moving sideways against the euro for the past four trading sessions. The dollar was also unable to pare last week’s drop versus the yen thus far.
EUR/USD traded near the opening level of 1.3523 as of 5:21 GMT today. GBP/USD ticked up a little from 1.7075 to 1.7078. USD/JPY was up from 101.39 to 101.49.
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