Dollar Rises for Third Day Versus Yen as Fed Meets; Rand Weakens

October 29, 2013

New York (Oct 29)   The dollar gained for a third day versus the yen as the U.S. Federal Open Market Committee began a two-day meeting amid forecasts it won’t announce any major changes to its asset-purchase program.

The Bloomberg U.S. Dollar Index rose to the highest level in more than a week before the policy makers issue a statement tomorrow. Australia’s dollar slid versus its major peers after Reserve Bank Governor Glenn Stevens said it will probably become “materially lower,” and the South African rand dropped. The yen gained earlier versus the dollar as jobs and retail sales rose before a Bank of Japan meeting this week.

“Ahead of the FOMC, people might be a bit more prudent and reducing risk positions,” Sebastien Galy, a senior foreign-exchange strategist at Societe Generale SA in New York, said in a phone interview. “The foreign-exchange market in general is more reticent to take on risk than the stock market.”

The dollar strengthened 0.5 percent to 98.13 yen at 2:46 p.m. New York time, reversing a decline that saw it weaken as much as 0.2 percent. The greenback appreciated 0.3 percent to $1.3747 per euro and touched $1.3737, the strongest level in a week, after losing 0.2 percent earlier. It has fallen 1.6 percent against the 17-nation currency this month. Europe’s shared currency gained 0.2 percent to 134.90 yen.

Bloomberg’s dollar gauge, which monitors the greenback against 10 other major currencies, advanced 0.3 percent to 1,005.59 and reached 1,066.22, the highest since Oct. 17.

Stocks rose, with the Standard & Poor’s 500 Index gaining 0.5 percent.

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