U.S. Dollar Higher on Fed Taper in Coming Months

The dollar rose against most major peers as Federal Reserve officials said they might reduce their $85 billion in monthly bond purchases “in coming months” as the economy improves, minutes of their last meeting show.

The euro dropped from a four-year high versus the yen as the European Central Bank is considering a negative deposit rate if more economic stimulus is needed, according to two people with knowledge of the debate. The yen strengthened as a panel said Japan’s government-run pension fund needs restructuring.

“The Fed came across less dovish,” Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co., said in phone interview. “The market is caught in this tug of war on the time line for a taper, so less-dovish minutes give a little more leverage to the camp in the market that expects the Fed to taper policy by March or sooner. That has increased the tailwind we’ve seen on the dollar.”

Bloomberg

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