Keith Jenkins and Candice Zachariahs
Oct 14, 2010
The dollar depreciated below 81 yen, a 15-year low, and reached its weakest since January against the euro before reports likely to fuel speculation the Federal Reserve will ease monetary policy further.
The Dollar Index, which tracks the dollar against the currencies of six major trading partners, reached a 10-month low before data forecast to show slower gains in U.S. wholesale costs and consumer prices. Singapore’s dollar rose to a record as the island’s central bank said it will widen the currency’s trading band to curb inflation. Australia’s dollar reached the highest since it began trading freely in 1983 as Asian stocks extended a global rally. The U.S. and Canadian dollars reached parity, the greenback’s weakest level since April, as minutes this week suggested the Fed may pump more cash into the economy.
“The market is in a state of anxiety over what’s likely to come from the Fed,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “Dollar holders are very nervous based on the Fed minutes, which suggest more unconventional policy measures. That could result in them keeping their foot on the printing press for longer and harder than maybe anyone had thought. Everyone seems to be selling the dollar because of the Fed view.”
This article was posted: Thursday, October 14, 2010 at 6:00 am