Reuters: US Dollar Report: FOREX-Dollar slips vs euro in volatile trade after Fed

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FOREX-Dollar slips vs euro in volatile trade after Fed Jun 20th 2012, 17:39 Tweet Share this Email Print Wed Jun 20, 2012 1:39pm EDT * Euro supported by Fed easing speculation * Greece seen closer to agreeing coalition government * Euro resistance at $1.2748, post-election high By Wanfeng Zhou NEW YORK, June 20 (Reuters) - The dollar edged lower against the euro in volatile trade on Wednesday after the Federal Reserve extended its monetary stimulus to support a stalling U.S. economic recovery. The Fed said it would extend Operation Twist, an effort to depress borrowing costs by selling short-term bonds to buy longer-dated ones, a move widely expected by market participants. The dollar initially rallied to a session high against the euro as some investors were disappointed that the Fed did not signal a third round of quantitative easing. But the euro later rebounded and last traded at $1.2706, up 0.2 percent on the day. "The initial read of the Fed statement was somewhat less dovish than many expected because they didn't really hint at any additional QE measures," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "On second look, maybe the market is thinking they are flagging some deflationary risks that we're seeing as well as having left the door wide open to another round of QE if conditions get worse," he said. Markets are expected to be volatile as traders sift through the Fed's statement and wait for a news conference by Fed Chairman Ben Bernanke scheduled for 2:15 p.m. ET (1815 GMT). The dollar gained further versus the yen and last traded at 79.61, up 0.9 percent, compared with 79.41 earlier. 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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