WSJ:WORLD FOREX: Dollar Recovers Bit, But Faces Tough Slog Post FOMC
--Dollar recovers some vs euro, Aussie, others on position adjustments
--Dealers say the gains are likely temporary after the FOMC
--The Fed's committment to near-zero rates until mid 2013 to weigh on greenback
By Andrew Monahan
Of DOW JONES NEWSWIRES
TOKYO (Dow Jones)--The dollar regained some ground against the euro and other risk-sensitive currencies in Asia Wednesday, as short-term investors bought back the currency after the Federal Reserve sent it sliding the previous day.
But dealers were unimpressed with the greenback's gains, which they said came in thin trade and did not indicate any break with the recent longer-term trend toward further dollar weakness.
After the Fed's policy-setting Open Market Committee said Tuesday that it will keep rates at ultra-low levels until the middle of 2013, the dollar will likely continue to struggle in coming months, dealers said.
"The FOMC's committing to a near-zero policy for such a duration is a big thing, and naturally it will continue to weigh on the dollar," said Hiroshi Maeba, a senior FX dealer at Nomura Securities.
At 0450 GMT, the euro was at $1.4349 compared with $1.4373 late Tuesday in New York. The ICE Dollar Index, which measures the greenback against a basket of currencies, was at 74.04 from 73.91. The euro was at Y110.39 compared with Y110.55.
The dollar's continued weak tone was most evident against the yen, among the majors. The U.S. unit was at Y76.92 at 0450 GMT from Y76.96 late Tuesday in New York.
After the FOMC decision sent Treasury yields down sharply, Osamu Takashima, chief foreign exchange strategist at Citibank Japan said that the low short-term U.S. interest rates suggest, all else being equal, that the dollar should be around Y74.00.
China's central bank set the dollar at a record-low fixing against the yuan, with the central parity rate at CNY6.4167.
"In light of the FOMC outcome, we'd have to say the dollar should face more selling ahead," said Toshihiko Sakai, chief manager of forex and financial products trading at Mitsubishi UFJ Trust and Banking.
Interbank Foreign Exchange Rates At 00:50 EDT / 0450 GMT
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