Home > All > Forex Market Review – Dollar soars against yen after FOMC minutes
Posted on July 11, 2012 by Trading Point Investment Research Desk at 8:03 pm GMT
The dollar rose after the FOMC minutes, pushing the euro to a new two-year low. Last month’s Federal Reserve meeting showed further stimulus was not imminent this year though possible in the future only if U.S. economic conditions worsened. Had the Fed given stronger signals for more QE3 this would weaken dollar, as quantitative easing through more asset purchases usually weakens a currency.
The dollar surged versus the yen, rising to 79.71 after the FOMC minutes, up from a day low of 79.12. The dollar index was up 0.2 percent at 83.534, boosted by the dollar gains against the yen.
EURUSD fell to a fresh two-year low of 1.2212 after the minutes, but bounced later to last trade at 1.2247. Euro remains vulnerable over concerns how the EU will tackle the debt crisis after it appeared there is a delay launching the ESM bailout fund since Germany has not ratified it yet.
Against the British pound, euro fell to a new three-and-a-half-year trough of 78.69 pence in New York trading hours before recovering back up to 78.98.
Sterling dropped 0.3 percent against a broadly strong dollar after the FOMC minutes to 1.5485.
Looking ahead, we have the Bank of Japan monetary policy announcement. The central bank is expected to maintain its key interest rate at 0.1 percent and not ease policy further. If so, this would keep the yen supported.
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