The euro moved in a range around the dollar, holding ground around the $1.30-handle, as markets looked ahead to the outcome of the Federal Open Market Committee meeting amid hopes for further asset purchases by the U.S. central bank.
The common currency was at $1.3002, after moving in a range between $1.2995 to $1.3013, compared with $1.3007 late in North America on Tuesday.
The ICE dollar index , which measures the greenback’s performance against a basket of six major global rivals including the euro, rose to 80.083 from 80.061.
“There haven’t really been any fresh leads in the Asian session, but market participants are looking forward to the FOMC statement and positioning themselves ahead of it. Risk currencies remain near the overnight highs,” said Stan Shamu, a market strategist at IG Markets.
Shamu said the Fed is expected to “effectively” announce it will buy U.S. Treasurys worth $45 billion a month to replace Operation Twist — its existing program to buy longer-maturity bonds while selling an equal amount of short-term securities, which expires at the end of the year.
He added that while there might not be a huge reaction to the Fed’s announcement of such an expansion of its quantitative easing, one should “look for a sizeable negative reaction if the Fed either does a smaller size, or delays the program until the New Year.”
Among other major currency pairs, the British pound was trading at $1.6111 and the Australian dollar was changing hands for $1.0529, compared with their U.S. traded values of $1.6116 and $1.0530, respectively.
Against the Japanese currency, the dollar was fetching 82.67 yen, up from ¥82.28.
Marketwatch
