Reuters: US Dollar Report: FOREX-Dollar firms after Fed stands pat on monetary policy

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FOREX-Dollar firms after Fed stands pat on monetary policy Apr 25th 2012, 17:41 Tweet Share this Email Print Wed Apr 25, 2012 1:41pm EDT * U.S. dollar firms against euro, yen after Fed decision * U.S. intreest rates left unchanged by Fed * Central bank hints at rising economic growth ahead * Euro off earlier three week high vs greenback By Daniel Bases NEW YORK, April 25 (Reuters) - The dollar strengthened on Wednesday after the U.S. Federal Reserve said U.S. economic activity should grow moderately in the next quarters then pick up speed, but interest rates will remain low through late 2014. The brighter economic outlook lowered expectations the Fed would try to boost the economy with additional stimulus measures. That caused the euro to pull back further from a three week high against the greenback hit earlier on Wednesday on hopes the central bank might hint at a third round of quantitative easing. The dollar advanced against the yen but overall remained within tight trading ranges. The Fed's previous quantitative easing programs weighed on the dollar against its peers as it effectively meant printing money. "The quote about the economy picking up gradually might show a little more of a bullish sentiment at the 2 o'clock release of the growth forecast. We might see the dollar gain a little bit on that as it might lessen the likelihood of QE3," John Doyle, currency strategist at Tempus Consulting in Washington, D.C. said. The Fed has conducted two rounds of economic stimulus in addition to keeping interest rates near zero. It has bought $2.3 trillion worth of securities in moves known as quantitative easing in an attempt to spur growth. The possibility of a third round, known as QE3, has diminished as the economy strengthens. In its statement, the Fed said the vote to leave interest rates unchanged in the zero to 0.25 percent range was 9-1. The Fed will release its latest round of quarterly forecasts at 2 p.m. (1800 GMT) on Wednesday and Fed Chairman Ben Bernanke will follow with a news conference at 2:15 p.m. (1815 GMT). The euro traded up 0.05 percent on the day at $1.3200, off the earlier three week high of $1.3235, according to Reuters data. The euro was supported by successful debt auctions in Europe on Tuesday which sent yields on Dutch, Spanish and Italian bonds lower. Against the yen, the dollar traded at 81.41, up 0.07 percent on the day but off the high of 81.56. "Everything is status quo so far as I can tell. The Fed won't make any moves to tighten unless you see really strong numbers over several quarters and we're certainly not there yet," said Bob Gelfond, chief executive of MQS Asset Management in New York. Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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