By: Barbara Zigah
Following the Federal Reserve’s announcement yesterday confirming the speculation that additional quantitative easing measures would be forthcoming, the U.S. Dollar slipped broadly. The U.S. Dollar held tight near recently struck lows versus the common currency Euro and the Australian Dollar. With risk appetite whetted, investors shunned the weakened U.S. Dollar in droves, supporting these higher risk, higher yielding currencies.
As reported at 2:52 p.m. (JST) in Tokyo, the greenback traded lower versus the Euro at $1.4200, a 10-month low just after the announcement before rebounding slightly to $1.4139.
The Australian Dollar, which has been slipping in and out of parity with the greenback, was trading at $1.0060 on the Fed announcement, then retreated to $1.0059. The U.S. Dollar also traded .3% lower against the Japanese Yen, slipping just below 81.00 Yen and within striking distance of the 79.75 Yen record low. Traders remain wary of possible Yen intervention, in spite of the G20 pledge.
The Pound Sterling also rose against the greenback, striking a multi-month peak of $1.6180 on the Fed announcement, before retreating to $1.6126. The Bank of England meets today and a key decision as to whether or not they will implement some sort of quantitative easing scheme will be forthcoming.
The U.S. Dollar Index, which measures the value of the greenback against a weighted basket of major currencies, eased 0.1% to 76.31 .DXY.