The outcome of Wednesday’s Federal Reserve meeting is expected to set the tone for trade in the U.S. dollar heading into 2014, whatever decision is reached on the highly-anticipated tapering of monetary stimulus.
Contrary to expectations, the dollar has not seen a broad-based surge even as market expectations for when Fed tapering will begin have been bought forward in the face of upbeat economic data.
While the dollar hit a five-year high against the yen last week, it has weakened almost 8 percent against the euro in the past three months. The dollar index, which measures the greenback’s value against a basket of other major currencies, is hovering around 80.04 – not far from where it ended last year.
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