American focus: the dollar is under pressure
The dollar touched a two-month low against the currencies of major U.S. trading partners on expectations that the Federal Reserve will reiterate the need to buy $600 billion in Treasuries to support the economy.
Sterling climbed from the lowest level against the dollar in almost two weeks as the Bank of England said two policy makers out of nine voted this month for an interest-rate increase. The euro rose earlier versus the dollar on speculation the currency region’s debt crisis will be contained and after a report showing a gauge of German inflation accelerated.
“Even though the U.S. is seeing some economic recovery gain traction, there’s still no real clue that the Fed is going to be departing from its quantitative-easing program,” said Carl Forcheski, a director on the corporate currency sales desk at Societe Generale SA in New York.
The Fed, which concludes a two-day policy meeting today, introduced the second round of its program of quantitative easing in November to keep borrowing costs low and shore up the economy. The central bank will hold its target lending rate at zero to 0.25 percent.