US$ falls against major currencies

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September 23, 2009

The USD pulled back against major currencies Tuesday on profit-taking and speculations on US Federal Reserve meeting. The Fed began its two-day monetary policy meeting Tuesday and will announce rate decisions today. The central bank is widely expected to leave Key rates unchanged at historic low level, and its statement after the meeting would be fundamentally same with previous statements. If the statement is in line with expectations, it means that the Fed would keep its ultra-loose monetary policy for a while, increasing pressures upon the dollar. Any unexpected signal could spark big fluctuations in currency market. It was reported that US is proposing a broad new economic framework to tackle global economic imbalances on the G- 20 financial summit due later this week. The framework may lead to further weakness in USD I beleive. It prompted investors to take profit from the greenback’s gains in previous sessions. The euro bought US$1.4792 in late New York trading compared with US$1.4677 it bought late Monday. The GBP rose to US$1.6352 from US$1.6194. The USD fell to 1.0683 Canadian dollars from 1.0778 Canadian dollars, and fell to 1.0240 Swiss francs from 1.0327 Swiss francs, and fell to 91.24 Japanese yen from 92.13 Japanese yen.