The dollar stabilized on international currency markets on Tuesday, as investors decided to take a breather from speculations aimed at pressuring the exchange rate of the greenback, as they are uncertain about the specific measures of quantitative easing that the U.S. Federal Reserve will adopt next week.
In this mood, the euro weakened against the dollar by 0.26 percent, sliding to 1.3926 dollars. The American currency also strengthened against the yen, rising 0.47 percent to 81.14 yen, recovering from its lowest level against the Japanese currency in 15 years of 80.41 yen, which it reached at the beginning of the week. The market is convinced that the Fed’s monetary committee will decide to further ‘soften’ monetary policy at the meeting scheduled for next week, but this belief is partly already factored into the already quite low value of the dollar. Uncertainty regarding the scale and pace of the planned measures is causing nervousness among investors, who are therefore inclined to further pressure the American currency.
Support for the dollar was also provided by a statement from Japanese Finance Minister Yoshihiko Noda, who warned that the government would decisively intervene in the currency markets if necessary. “Japan has clearly indicated that it intends to intervene in the event of a sharp decline of the dollar against the yen. Now everything depends on the Fed’s decision, and market players do not want to take aggressive positions ahead of such an important decision,” assesses currency strategist at Unicredit in Milan, Stephan Maier. Among other currencies, the British pound stood out, strengthening against the dollar by one percent on the back of data showing a 0.8 percent growth in British GDP in the third quarter. The pound was traded at 1.5897 dollars. (H)
