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U.S. Dollar Stays Lower as Traders Weigh Taper Odds

The dollar remained lower against the majority of its major peers as traders speculated whether the U.S. economy is strong enough for the Federal Reserve to start reducing stimulus next week.

The greenback traded near the lowest this month against the euro before a report forecast to show U.S. jobless claims rose for the first time in three weeks. The Federal Open Market Committee meets to decide policy on Sept. 17-18. Demand for the dollar as a haven receded as the U.S. delayed a congressional vote on military action in Syria. The New Zealand dollar climbed to the highest in more than two weeks after the Reserve Bank signaled it may raise its key rate from a record low earlier than previously expected.

“The Fed will start tapering next week, but I think they might also be a bit dovish, and that might see the U.S. dollar weaken again in a knee-jerk reaction,” said Joseph Capurso, a Sydney-based currency strategist at Commonwealth Bank of Australia (CBA), the nation’s biggest lender. “The Syria issue had supported the U.S. dollar, but it seems to have eased off a bit.”

Bloomberg [1]

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