Poor Economic Data Makes Dollar Soft Ahead of Fed Meeting

The US dollar was soft as worse-than-expected macroeconomic data made Forex traders speculate that the Federal Reserve may avoid tampering of quantitative easing or at least do it at a smaller scale than was expected previously.

The US Consumer Price Index rose 0.1 percent in August, missing the forecast of 0.2 percent. It was not a big difference, but together with the previous poor data it led to talks that economic growth is not as robust as was thought before. Such speculations makes stimulus tampering less likely.

Most market participants still believe that the Fed is going to reduce QE, but at a smaller scale. Previously, experts were talking about a trimming of asset purchases from $85 billion per month to $75 billion, but now $80 billion is considered to be a likely figure.

EUR/USD was at about 1.3352 as of 00:18 GMT today after rising from 1.3332 to 1.3357 yesterday. GBP/USD advanced from 1.5894 to 1.5935 on the previous session, but retreated to close at 1.5900 and traded near that level on the current trading session. USD/JPY was flat at 99.13.


Poor Economic Data Makes Dollar Soft Ahead of Fed Meeting  Poor Economic Data Makes Dollar Soft Ahead of Fed Meeting Reviewed by Sopheap Chhin on 7:39:00 PM Rating: 5

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