SH: FX round-up: Dollar recovers ahead of Fed meeting
LONDON (SHARECAST) - The dollar rose against major rivals on Monday as risk appetite slipped away ahead of the Federal Open Market Committee’s two-day policy meeting and Thursday’s G20 meeting in Pittsburgh.
The Fed is widely expected to keep rates unchanged while focus at the G20 meeting is expected to be on government regulation of capital markets.
The greenback hit a two-week high against the Japanese yen, rising 0.8% to 92.05 yen while the euro fell 0.3% to $1.4672. The dollar index, which measures the US currency against a basket of six others, rose to an intra-day high of 77.108 before easing back to around 76.716 in late afternoon trading.
Currency was thin on the ground Monday with many Asian markets closed for an extended weekend holiday.
Sterling slumped to a five month low against the euro at 90.78p after the Bank of England’s latest quarterly bulletin underlined its concerns about Britain's economic imbalances.
The BoE said, “the financial crisis may have led overseas investors to reassess their willingness or ability to purchase sterling assets and thereby finance the UK trade deficit. As a result, the long-run sustainable real sterling exchange rate…may have fallen.”
