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Forex - Dollar broadly higher vs. rivals as Fed decision eyed

Published 09/21/2011, 10:56 AM
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Investing.com – The U.S. dollar was broadly higher against its major counterparts on Wednesday, as persistent concerns over the euro zone financial crisis weighed and amid speculation the Federal Reserve would announce fresh measures to shore up U.S. growth later in the day.

During U.S. morning trade, the greenback was up against the euro, with EUR/USD shedding 0.23% to hit 1.3669.

Greek Prime Minister George Papandreou convened a cabinet meeting earlier Wednesday, as the government scrambles to speed up the implementation of austerity measures needed to unlock its next tranche of aid in order to avert a default.

The greenback was also higher against the pound, with GBP/USD tumbling 0.88% to hit 1.5594.

Earlier in the day, the minutes of the Bank of England’s September policy meeting showed that policymakers believed the economic conditions seen in the past month had strengthened the case for an "immediate" return to quantitative easing.

A separate report showed that U.K. public sector net borrowing rose significantly more-than-expected in August, climbing to GBP13.2 billion, above expectations for GBP11.4 billion.

Elsewhere, the greenback was down against the yen but was higher against the Swiss franc, with USD/JPY dipping 0.03% to hit 76.41 and USD/CHF rallying 0.85% to hit 0.8953.

Japanese Finance Minister Jun Azumi said earlier that he was closely watching markets and remained ready to take “bold” action on currencies if needed.

Meanwhile, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD surging 0.71% to hit 0.9995, AUD/USD falling 0.85% to hit 1.0189 and NZD/USD plunging 1.06% to hit 0.8153.

Earlier in the day, government data showed that Canadian consumer price inflation rose more-than-expected in August.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.43% to hit 77.84.

The Federal Reserve was to conclude its two-day policy meeting later in the day, as speculation mounted that the central bank would announce fresh measures to boost U.S. growth.

Central bank Chairman Ben Bernanke was expected to announce plans to replace short-term Treasuries with long-term bonds, in a move known as Operation Twist.

Elsewhere Wednesday, industry data showed that U.S. existing home sales rose more-than-expected in August, rebounding from an eight-month low.



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