By Bradley Davis Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The dollar gained broadly Wednesday after a Wall Street Journal report dashed expectations that the Federal Reserve would engage in a massive program of "quantitative easing" asset purchases to kick-start the U.S. economy. After recently hammering the greenback on the idea the Fed would announce a dollar-weakening shock-and-awe program to stoke growth, investors turned back to the buck on the report the Fed over several months will purchase only a few hundred billion dollars worth of Treasurys, far from the more than $1 trillion some had expected. "Until recently investors ran scared of the dollar and interpreted potential policy steps as indicative of a desire to cheapen the currency and flood the economy with money," said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Conn. "That view is finding little follow-through support as analysts settle for a more conservative consensus number on what the [Fed] might announce when it meets next week," he said. Wednesday morning, the dollar was at $1.3813 from $1.3855 late Tuesday, according to EBS via CQG. The dollar was at Y81.76 from Y81.47, while the euro was at Y112.92 from Y112.90. The U.K. pound was at $1.5821 from $1.5834. The dollar was at CHF0.9879 from CHF0.9848. The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.920 from 77.675. Better-than-expected U.S. durable goods figures for September did little to help the dollar extend its gains, as "nobody's really putting on any major positions now," ahead of the Fed announcement next week of its possible stimulus package, said Richard Ilczyszyn senior market strategist at Lind-Waldock in Chicago. Still, while the dollar Wednesday posted near across-the-board gains, it may not gain much lasting traction even on a more muted Treasury-buying program, said Daragh Maher, deputy head of global foreign exchange strategy at Credit Agricole CIB in London. "Market discussion centers not on whether U.S. policy will weaken the U.S. dollar, but how much it is likely to weaken the dollar," he said. "The temptation to sell the U.S. dollar into any rally will remain strong so long as the uncertainty lingers," around the size and scope of the Fed program, he said, noting if the report of a smaller program is true, the Fed could always leave the door open to more easing in the future. The Journal reported the U.S. central bank is likely to unveil a program of U.S. Treasury bond purchases worth a few hundred billion dollars over several months, a measured approach in contrast to purchases of nearly $2 trillion it unveiled during the financial crisis. The announcement is expected to be made at the conclusion of a two-day meeting of its policy-making committee next Wednesday. The dollar also gained sharply against the Australian dollar, which was dragged down by weaker-than-expected domestic inflation data. A slower rate of inflation tamps down expectations the Reserve Bank of Australia will increase key interest rates at its next meeting, leading the Australian dollar to shed nearly 1.5% against the greenback. Canada Morning The Canadian dollar was lower again Wednesday morning as the currency suffered from the broad strength in the U.S. dollar as well as weakness in commodities. The U.S. dollar was at C$1.0292 from C$1.0240 late Tuesday. The Canadian dollar's underperformance is broadly line with that of the Australian and New Zealand dollars, although the Australian unit is lagging its fellow dollar bloc currencies, said TD Securities. "The Australian dollar has been hit especially hard by weaker-than-expected CPI data, which has dampened immediate RBA rate hike expectations, while the [Canadian and New Zealand dollars] find themselves relatively weaker on the back of the USD bounce and drop in commodity prices," TD said. There are no significant data releases in Canada Wednesday. At 4:15 p.m. EDT (2015 GMT), Bank of Canada Governor Mark Carney and Senior Deputy Governor Tiff Macklem will appear before the Senate Standing Committee on Banking, Trade and Commerce. -By Bradley Davis, Dow Jones Newswires; 212-416-2654; bradley.davis@dowjones.com (Don Curren in Toronto contributed to this article.)

Source