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The dollar rose versus most major counterparts this week on bets the Federal Reserve will press on with reducing stimulus, even amid weaker U.S. economic data that may have been caused by winter storms.
The greenback headed for its biggest weekly advance this year against its Japanese peer before Fed Chair Janet Yellen joins Group of 20 officials in Sydney for talks starting tomorrow. The communique from the meeting will urge policy makers to calibrate policies to avoid volatile capital flows, especially during Fed tapering, according to an official from a member country involved in discussions on communique comments on central bank coordination.
Separately, St. Louis Fed President James Bullard and his Dallas counterpart Richard Fisher are scheduled to make remarks today.
The central bank’s January meeting minutes released this week signaled policy makers supported a continued decrease in bond purchases. The Fed announced in December it would start paring stimulus by cutting monthly bond buying by $10 billion per month, and policy makers decided on another reduction of the same size last month, to $65 billion. Policy makers next meet on March 18-19.
Australia’s dollar weakened after prices for iron ore, its biggest export, dropped 1.2 percent over two days to $122.90 a metric ton yesterday, according to data compiled by The Steel Index Ltd. Total iron-ore inventory at Chinese ports monitored by Shanghai Steelhome Information Technology Co. climbed to 100.3 million tons in the week ended Feb. 14, the highest in figures going back to March 2010.
EUR / USD: during the Asian session, the pair traded in the range of $ 1.3710-20
GBP / USD: during the Asian session the pair fell to $ 1.6635
USD / JPY: during the Asian session, the pair rose to Y102.60
Friday's calendar quietens considerably, with only limited data on both sides of the Atlantic. Additionally, the two key Fed speakers expected are both schedules to appear after the market close. The European calendar gets underway at 0800GMT, with the release of the Swiss February consumer and manufacturing confidence data. At 0830GMT, the Netherlands sees the release of the January house price index. The Italian January final HICP data will cross the wires at 0900GMT. Analysts are looking for a fall of 2.1% on month, a rise of 0.6% on year.
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