EUR/USD at 7-Month High above 1.35 as Fed Avoids Taper

The dollar traded 0.2 percent from a seven-month low against the euro after the Federal Reserve kept the current pace of asset purchases that tend to debase the currency, defying economists predicting a stimulus reduction.

Demand for the greenback waned after policy makers maintained the U.S. central bank’s $85 billion of monthly purchases of government debt and mortgage-backed securities, known as quantitative easing or QE, compared with a forecast by economists surveyed by Bloomberg News for a $5 billion reduction in Treasury purchases. The yen weakened versus most of its major peers before a report that may show Japan’s trade deficit widened last month.

“The Fed statement was noticeably dovish, causing dollar selling,” said Yuki Sakasai, a foreign-exchange strategist in New York at Barclays Plc. “There is expectation that there may more QE.”


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