The dollar held near the lowest in three weeks against the euro before the Federal Reserve concludes a two-day meeting today when policy makers will decide whether to slow its $85 billion of monthly asset purchases.
The Federal Open Market Committee will reduce Treasury purchases to $40 billion, while continuing to buy $40 billion of mortgage backed securities, according to the median estimate of economists surveyed by Bloomberg News. The Bloomberg U.S. Dollar Index was 0.2 percent from the lowest in five weeks. New Zealand’s kiwi dollar held a two-day gain after the nation posted a smaller current account deficit than economists forecast.
“The market is waiting for the results of the FOMC meeting,” said Kazuo Shirai, a trader at Union Bank NA in Los Angeles. “Should the Fed decide not to taper, the dollar will be sold, and the greenback will likely be bid if it does. I expect a gradual wind down by about $10 billion.”
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