Dollar moves in tight range in Asia after Fed announces stimulus cut
May 2, 2014, 12:21 am TWN
TOKYO -- The dollar moved in a tight range in Asia on Thursday after the U.S. Federal Reserve said it would make another cut to its stimulus as the economy picks up, but first-quarter GDP figures disappointed.
In afternoon Tokyo trading, the greenback fetched 102.17 yen, down from 102.23 yen in New York on Wednesday.
The euro rose to US$1.3885 and 141.87 yen from US$1.3866 and 141.75 yen in U.S. trade.
The Fed, concluding a two-day policy meeting, said economic activity “has picked up recently after having slowed sharply during the winter in part because of adverse weather conditions.”
The U.S. central bank, as expected, continued a plan to gradually taper its bond-buying stimulus program, cutting another US$10 billion a month from the plan, while maintaining ultra-low interest rates.
The Fed's positive outlook helped offset some disappointment over a report from the Commerce Department, which said gross domestic product in the world's biggest economy grew by a scant 0.1-percent annual rate in the first quarter.
The yen was under pressure after the Bank of Japan (BOJ) left its monetary policy unchanged but lowered the country's growth projections, fuelling speculation it will expand its massive stimulus drive, which tends to weigh on the currency.
The BOJ's chief Haruhiko Kuroda repeated a view that he would “not hesitate” to unleash further measures as the bank chases an inflation target seen as key to reversing years of falling prices and lackluster growth.
“It is most likely in the monetary policy meeting on 12-13 June that the BOJ will ease further by enhancing the asset purchase program,” Credit Agricole said.
In the eurozone, inflation rose to 0.7 percent in April, slightly below analyst forecasts but up from the 0.5 percent reported in March which was the lowest rate since October 2009.
Fears over deflation in the 18-member bloc have boosted speculation of further policy action from the European Central Bank.
In other trading, the dollar inched up to 44.59 Philippine pesos from 44.56 pesos on Wednesday, to 1,033.30 South Korean won from 1,033.23 won, and to 32.36 Thai baht from 32.33 baht.
The greenback weakened to SG$1.2532 from SG$1.2567, to 11,562.30 Indonesian rupiah from 11,567.50 rupiah.
The Australian dollar rose to 93.00 U.S. cents from 92.86 cents while the Chinese yuan eased to 16.30 yen from 16.36 yen.