By: Barbara Zigah
In Tokyo trading today, the U.S. Dollar moved higher versus the Japanese Yen and the common currency Euro as investors speculate that the Federal Reserve will likely initiate quantitative easing in tranches.
How QE will be unwound will be decided at next week’s meeting of the Federal Open Market Committee. According to a recent report, the Fed is expected to institute a program whereby purchases of U.S. Treasury Department instruments will be made over a period of several months; estimates for the program’s likely size have ranged from $500 billion and up to $1.5 trillion.
The U.S. Dollar traded against the Japanese Yen at 81.63 Yen, a rise of .2% and pulling from the 15-year trough of 80.41 Yen which was hit on the EBS platform earlier in the week. Versus the Euro, the U.S. Dollar is trading at $1.3820, a decline of .3% but rebounding from the earlier session low of $1.3802.
Some see the gradual easing program as a positive move on the Fed’s part. That caution is reflected in higher Treasury yields, which climbed to a 1-month peak on the 10-year note. Markets have already priced in the likelihood of quantitative easing; now it will be the details that will factor into the greenback’s direction.