Dollar Falls Before Fed Decision, Aussie Rebounds
The dollar fell against all its Group-of-10 peers, with the Federal Reserve widely expected to leave interest rates unchanged on Wednesday. Australia’s dollar rebounded after briefly slipping following slower-than-expected inflation data.
The Bloomberg Dollar Spot Index fell 0.2% after rising for four straight sessions. The yen gained as leveraged funds fronted potential repatriation flows after a tsunami warning was issued for Tokyo bay following a strong earthquake, according to a trader
Australia’s dollar edged higher after briefly declining as slowing inflation supported the case for a rate cut from the Reserve Bank as early as August.
AUD/USD rose 0.2% to 0.6520.
“The FOMC looks like a placeholder, with the labor market cooling, not collapsing and given still elevated tariff cost inflation uncertainty,” Richard Franulovich, head of FX strategy at Westpac writes in note.
“Altogether more reasons than not to maintain strategic AUD longs, with modest upside targets, and keeping open minded and patient about the potential for a more vigorous AUD up move”
USD/JPY fell 0.4% to 148.89.
Treasuries were little changed across the curve with 10-year yield at 4.32%.
EUR/USD edged up 0.1% to 1.1560.
GBP/USD inched 0.1% higher to 1.3359.
Source: Bloomberg
