Dollar continues to slide ahead of Fed meeting

New York  (Dec 11) The US dollar fell again yesterday as expectations for significantly tighter monetary conditions from the Federal Reserve dissipated on hints of, at best, only a slight taper of its stimulus. At 2200 GMT the euro traded at US$1.3760 (RM4.41), up from US$1.3737 late Monday. The greenback fell against the Japanese yen, to ¥102.81 (RM3.21) from ¥103.28 yen, while the euro slipped to 141.48 yen from 141.89. (adsbygoogle = window.adsbygoogle || []).push({}); Lower Treasury bond yields were a sign that the market sees the Fed taking little or no action on rolling back its US$85 billion a month bond-purchase program when it holds a policy meeting next week. The yield on the 10-year US Treasury fell to 2.80 per cent from 2.86 per cent late Monday and 2.88 per cent Friday, while the 30-year dropped to 3.83 per cent, compared with 3.89 per cent the prior day and 3.92 per cent Friday. Fed officials said Monday that the stimulus taper would be discussed, with one suggesting a minor reduction could be useful while they wait for more confirmation of the strength of the economy. “With the Fed's December interest rate decision quickly approaching, it seems as though the central bank will carry its highly accommodative policy stance into 2014,” said DailyFX analyst David Song. In addition, expectations that Congress will soon reach a deal on a budget also contributed to the selling. US bond yields pushed higher, driving up the dollar, in September and October during the last budget showdown that threatened to see the country default on its obligations.