The U.S. dollar escapes from its 13-month low on Wednesday’s session. As of now, investors are anticipating the monetary stimulus statement from the U.S. Federal Reserve for hints on the next policy tightening.
The index which tracks the value of the greenback relative to its major opposing currencies, the U.S. dollar index, was marginally up at 94.109. It dropped to its lowest level since June 2016 at 93.638 last Tuesday. On the dollar’s performance against its peers, it was stable versus the Japanese yen at 111.89 yen. The greenback secured its gains after advancing about 0.7 percent on Tuesday.
The U.S. Federal Reserve is highly forecasted to maintain interest rates steady at its two-day meeting that started last Tuesday and concluded on Wednesday. The market is keeping a closer look on any signals on when it will start to reduce its balance sheet and if interest rates will be lifted once again this 2017.
OANDA’s head of trading in Asia-Pacific Stephen Innes says the likelihood of Fed signaling September as the starting date for paring its massive bond portfolio is also one of the center of attention. He added that this may not support the dollar than expected. The greenback has been pressured to the slow inflation and these brought doubts on whether the Fed will incite another rate hike this 2017.
On other currencies, the euro was unchanged at $1.1647. The common currency advanced more than $1.17125 last Tuesday as it was given a lift by an unexpectedly stronger German business survey.