By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The dollar gained on most of its major rivals in Asian trading after a report that the U.S. Federal Reserve’s quantitative-easing steps will be smaller than some investors had expected.
The Wall Street Journal, citing sources inside the Fed, reported Monday that central bank officials are considering open-ended, smaller-scale bond purchases rather than massive bond purchases with a finite end.
The euro (EURUSD 1.3469, +0.0030, +0.2232%) slipped to $1.3405 from $1.3487 in late North American trading Monday and the British pound (GBPUSD 1.5864, +0.0059, +0.3733%) fell to $1.5798 from $1.5863.
The dollar index (DXY 79.39, -.00, -.00%) , a measure of the U.S. unit against a basket of six major currencies, rose to 79.761 from 79.295 late Monday.
Against the Japanese yen, the dollar (USDYEN 84.1000, -0.1500, -0.1780%) slipped slightly to ¥84.21 from ¥84.27
In other Asian currency trading, the People’s Bank of China set the official rate around which its yuan is allowed to trade against the greenback — a level which some analysts said marked a change from recent yuan appreciation.
After fixing the yuan reference rate at a “provocatively weak level” of 6.7098 to the dollar Monday, it again set it above the 6.70 level at 6.7051, “despite the market trading comfortably below that level,” said currency analysts at FxPro.
“China is definitely not retreating into its bunker,” they said, adding, “Interestingly, yuan forwards are becoming less optimistic in terms of expecting additional yuan appreciation over the next twelve months.”
