CURRENCIES: Dollar Edges Down Vs. Rivals Ahead Of Fed
By Lisa Twaronite
The dollar edged down in Asian trading Wednesday ahead of the conclusion of the U.S. Federal Reserve's two-day policy meeting, at which central bankers aren't expected to make any major policy changes.
The Fed is likely to leave the bank's short-term interest rate target intact at 0% to 0.25%, and unlikely to significantly alter language in its statement promising not to raise rates for a very long time. Lower rates tend to weigh on a currency by reducing the return on assets denominated in it.
The dollar index (DXY), which tracks the greenback against a trade-weighted basket of six major counterparts, fell to 76.921, from 77.022 in late North American trading Tuesday.
The euro was buying $1.4539, up from $1.4531 late Tuesday, while the dollar was at 89.63 yen, compared with 89.64 yen late Tuesday.
The Australian dollar was down 0.9% against its U.S. counterpart, at 89.70 U.S. cents, after data showed Australia's economy grew in the third quarter at a slower pace and below market expectations, because of declines in private investment and net exports.
Deputy Governor of the Reserve Bank of Australia Ric Battellino reportedly said Wednesday that Australian monetary policy has returned to a normal range, and that the current level of deposit rates, housing loan rates and business loan rates would have been consistent, before the crisis, with a cash rate of at least 4.75%. The rate is now at 3.75%.
The Australian dollar "suffered a one-two punch" from the weaker-than-expected GDP data "and a strong suggestion from Deputy Governor Battelino that widening bank margins is doing much of the RBA's work for it," wrote Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney.
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