Dollar retreats in Asia ahead of Fed, BoJ meet
Singapore-The dollar eased in Asia Monday after last week’s pick-up as investors await crucial policy meetings at the Federal Reserve and Bank of Japan later this week. The greenback rose Friday after the release of higher-than-forecast US inflation for August strengthened the case for a US interest rate hike. But a series of below-part readings on the economy, including jobs creation and factory activity, have fuelled speculation the central bank will stop short of tightening borrowing costs, which has in turn kept the dollar in check.
“Forex markets are going to be all about central banks this week,” said Greg McKenna, chief market strategist at Australia-based retail forex broker AxiTrader. “We expect the Fed to stay on pat this week,” Singapore’s United Overseas Bank (UOB) said in a note, adding however it expects a 25 basis points increase when policymakers meet next on December 13 and 14.
The Fed’s decision will come hours after the BoJ wraps up its own meeting. Reports last week said Japanese policymakers are discussing cutting interest rates deeper into negative territory as they struggle to kickstart inflation and economic growth.
In Singapore Monday afternoon the dollar was at 102.05 yen from 102.27 yen in late New York trade Friday. Japanese financial markets are closed Monday for a holiday. The euro was changing hands at $1.1168, up from $1.1156, while the single currency dipped to 113.96 yen from 114.09 yen.
Source: Pakistan Observer