US Dollar Gains Strength After FOMC Minutes

Banking, finance, and taxes

Published: July 12, 2012 9:03 am

The US dollar continues to flex its muscles today, following the release yesterday of the minutes of the FOMC’s June meeting. The minutes revealed little enthusiasm for another round of quantitative easing, and the dollar began to climb almost immediately.

The euro-dollar trade is below $1.22 this morning, its lowest level in more than two years. Versus British sterling, the dollar is nearly 0.4% stronger. The dollar is weakening against the yen however, down nearly -0.7%, after the Bank of Japan also chose not to add further monetary stimulus to the country’s economy. Both the dollar and the yen are viewed as havens in the current environment.

The dollar index against a basket of currencies, including the euro, is up 0.23% this morning at 83.762, after rising to nearly 84 earlier.

Bond auctions in Spain and Italy scheduled for tomorrow have also weighed on the euro as yields on these countries’ sovereign debt are once again rising after falling earlier this week.

Paul Ausick

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