Dollar holds steady, Fed stimulus in focus
AFPTOKYO--The dollar held steady in Asia on Wednesday as investors await the Federal Reserve's decision on whether to start reducing its massive stimulus and by how much.
September 19, 2013, 12:25 am TWN
In afternoon Tokyo trade the greenback edged up to 99.19 yen from 99.14 yen in New York Tuesday.
The euro was at US$1.3360 and 132.51 yen against US$1.3356 and 132.38 yen, helped by strong German economic data.
The dollar was likely to stay under the 100-yen mark in Asia before the outcome of the Fed's two-day policy meeting later in the day, said Osao Iizuka, head of foreign exchange trading at Sumitomo Mitsui Trust Bank.
“Because of uncertainty (about) the result, traders are opting to square their positions instead of taking fresh bets,” Iizuka told Dow Jones Newswires.
The Fed is widely expected to scale back its US$85 billion per-month bond-buying programme, with some analysts saying the market had already factored in a US$5-US$15 billion reduction in the scheme.
The initial dollar-yen reaction to the Fed's decision may hinge on how the U.S. stock market reacts, Iizuka said.
The dollar was mostly weaker against other Asia-Pacific currencies.
It declined to SG$1.2600 from SG$1.2635 on Tuesday, to 31.68 Thai baht from 31.82 baht and to 11,290 Indonesian rupiah from 11,335 rupiah.
The dollar also slipped to 1,082 South Korean won from 1,085 won, to 63.17 Indian rupees from 63.54 rupees and to 43.55 Philippine pesos from 43.72 pesos.
The Australian dollar rose to 93.52 U.S. cents from 93.11 cents, while the Chinese yuan fetched 16.21 yen from 16.18 yen.