Dollar Near Four-Month Low Against Peers Amid Fed Guidance Bets
The dollar was near a four-month low against its peers amid bets the Federal Reserve will drop its jobless-rate threshold today and adopt qualitative guidance for signaling when it will raise interest rates.
New Zealand’s dollar led gains yesterday among major currencies as investors’ appetite for higher returns grew, boosting stocks after President Vladimir Putin said Russia isn’t seeking to split Ukraine further after annexing its Crimea region. China’s yuan had the biggest three-day loss since at least 2007 amid concern financial risk is increasing.
“I don’t think there’s even a single person in the world who still think the Fed’s jobless-rate guideline is effective,” said Masato Yanagiya, the head of foreign exchange and money trading in New York at Sumitomo Mitsui Banking Corp. “There appears to be more people expecting the Fed to be a little bit more dovish on rates.”
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against its 10 major counterparts, was little changed at 1,012.01 as of 8:27 a.m. in Tokyo. It touched 1,011.35 on March 17, the lowest since Nov. 1.
The greenback traded at 101.42 yen after depreciating 0.3 percent to 101.44 yesterday. It was at $1.3932 per euro following a 0.1 percent decline to $1.3934. Europe’s common currency was little changed at 141.31 yen.
New Zealand’s kiwi dollar was at 86.21 U.S. cents from 86.23 yesterday, when it reached 86.40, the highest since April 12. It rose versus all of its 31 major peers yesterday.
The Standard & Poor’s 500 Index of U.S. shares rose 0.7 percent in New York yesterday.
Federal Reserve policy makers will conclude a two-day meeting today. The U.S. central bank will probably scrap its 6.5 percent jobless-rate threshold in favor of qualitative guidance for signaling when it will consider raising the benchmark interest rate, according to a Bloomberg News survey of economists. The unemployment rate was at 6.7 percent in February, near the lowest since October 2008.
The yuan weakened 0.2 percent to 6.1920 per dollar yesterday. The currency declined 0.9 percent since March 13, the biggest three-day drop in data going back to April 2007.