Dollar Extends 2014 Highs Versus Euro, Fed Eyed
Washington (July 29) The dollar continued to strengthen against European rivals Tuesday as the Federal Reserve kicked off its two-day policy meeting in Washington, DC .
Amid the backdrop of positive economic data, the Fed is widely expected to further trim its once-massive bond-buying plan by USD10 billion per month.
Traders will be looking closely at the Fed's accompanying statement for clues about when interest rates will rise.
Unemployment is nearing the Fed's 6% target for tightening and inflation has been creeping up to healthier levels in the past few months.
Meanwhile, the European Central Bank is seen introducing more stimulus to combat stagnation in the euro zone by summer's end.
The dollar rose to an new 8-month high of USD1.3410 versus the euro, and touched a 6-week peak of USD1.6930 versus sterling.
Gradual gains also took the dollar above Y102 versus the yen for the first time in weeks, as traders reacted to the best reading on US consumer confidence since 2007.
The Conference Board's Consumer Confidence Index rose to 90.9, above the prior month's showing of 86.4.
In addition to the Fed's rate decision, the economic calendar between Wednesday and Friday includes second-quarter GDP, a Federal Reserve decision, July payrolls, the July Institute for Supply Management manufacturing report and July car sales.
Source: AllianceNews