By: Barbara Zigah
The U.S. Dollar remains close to a 2 month low against the common currency Euro following the conclusion of yesterday’s U.S. Federal Open Market Committee meeting, after which the Fed confirmed its position that the current loose monetary policy is appropriate in order to spur employment.
As reported at 12:37 p.m. (JST) in Tokyo, the U.S. Dollar was trading against the Euro at $1.3705, slightly off the 2 month trough of $1.3723 struck yesterday. Despite the new composition of the FOMC, in a unanimous vote, it was decided that interest rates would be held at their current low, though future economic assessment might alter the plans.
In the Eurozone, Jean-Claude Trichet, president of the European Central Bank, remains concerned that controlling growing inflation is key. Market players expect that the topic will be discussed at next week’s meeting, and that plans for withdrawal from their current policy is likely to surface. Some market players see a possible rise to $1.38 or even $1.39 within a week. The Euro is getting support from the bond markets, with recent successful auctions suggesting that peripheral debt problems are, at least for the time being, less of a concern to investors.