BLBG:Dollar 0.4% From Two-Month Low Against Yen Before Fed
The dollar was 0.4 percent from an two-month low against the yen amid speculation Federal Reserve policy makers will signal additional stimulus at a two-day meeting starting today.
The euro snapped a decline from yesterday after U.S. Treasury Secretary Timothy F. Geithner and German Finance Minister Wolfgang Schaeuble backed a commitment by European leaders to do everything needed to defend the single-currency area. Australia’s dollar climbed to a four-month high versus the greenback after a government report showed building permits fell less in June than economists forecast.
“While the Fed is unlikely to do QE3 at this point, it’s possible they will come up with other forms of stimulus,” said Junichi Ishikawa, an analyst at IG Markets Securities Ltd. in Tokyo, referring to a third round of asset purchases, known as quantitative easing. “New stimulus measures could send U.S. interest rates lower and dollar-yen may decline on the back of that.”
The dollar was little changed at 78.24 yen at 8:29 a.m. London time after dropping to 77.94 yen on July 23, the weakest level since June 1. The U.S. currency declined 0.1 percent to $1.2268 per euro. The euro advanced 0.1 percent to 95.95 yen.
The Australian dollar was little changed at $1.0506 after rising to $1.0537, the strongest since March 27.
-- With reporting by Mika Otsuka in New York, Monami Yui, Kazumi Miura and Hiroko Komiya in Tokyo. Editors: Nicholas Reynolds
To contact the reporters on this story: David Goodman in London at dgoodman28@bloomberg.net; Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
