Wednesday, October 8, 2014

U.S. dollar was boosted before the Fed

The dollar gained against most of its major peers before the Federal Reserve releases minutes of its last meeting as investors weighed the timing of the first interest-rate increase since 2006. The greenback gained 0.3% to $1.2633 per euro after touching $1.2501 on October 3, the strongest since August 2012. It climbed 0.3% to 108.39 yen from yesterday, after falling 1.6% in the past two sessions. The yen was little changed at 136.94 per euro from yesterday, when it touched 136.56, the strongest since September 8.

The Fed, which meets October 28-29, is on track to end a program of stimulatory bond purchases this month. Futures’ trading shows a 45% likelihood that the U.S. central bank will raise rates to 0.5% or higher by the end of July. The target rate has been maintained in a range of zero to 0.25% since 2008 to support the economy. The U.S. economy is seen expanding 3.1%, compared with a 3% pace forecast in July, the IMF said.

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