US dollar holds steady in Asia ahead of minutes from Fed policy meeting
July 10, 2014, 12:01 am TWN
TOKYO--The U.S. dollar was little changed in Asia on Wednesday as investors awaited the release of minutes from the Federal Reserve's policy meeting last month.
In late afternoon Tokyo trading, the greenback was quoted at 101.64 yen, against 101.57 yen in New York Tuesday.
The euro bought US$1.3617 and 138.38 yen, from US$1.3611 and 138.24 yen.
“The event of the day will be the FOMC (Federal Open Market Committee) minutes,” National Australia Bank said in a note.
Among the key issues, traders want to know “how much importance is being given to the better data of late and the approach of the Fed's targets in inflation and employment.”
At its June meeting, the Fed slashed its 2014 growth forecast for the U.S. economy after a severe winter but kept policy on hold, showing faith in a modest rebound.
While the bank has been cutting winding down bond-buying, interest rates have been next to zero for years and markets are keen to know when they might rise — which would support the dollar.
Fed officials now expect the benchmark federal funds rate to reach 2.5 percent by the final quarter of 2016, slightly higher than the projection they made in March.
“Admittedly, the change could partly reflect the shuffling of personnel on the FOMC rather than any underlying shift in the interest rate outlook,” Capital Economics said.
“But we will be looking for any signs of a more hawkish tilt.”
The dollar eased against most other Asia-Pacific currencies.
It weakened to SG$1.2428 from SG$1.2457 on Tuesday, to 59.75 Indian rupees from 59.82 rupees, and to 11,626 Indonesian rupiah from 11,696 rupiah.
The greenback fell to 32.33 Thai baht from 32.40 baht, to 43.36 Philippines pesos from 43.48 pesos.
It edged up to 1,012.19 South Korean won from 1,011.11 won.
The Australian dollar eased to 93.36 U.S. cents from 93.86 cents, while the Chinese yuan eased to 16.39 yen from 16.40 yen.