Expectations of larger swings in the dollar against the yen climbed toward a two-month high as traders assess U.S. economic data to see when the Federal Reserve will start to taper monetary stimulus.
The greenback was little changed versus the yen after completing a seventh weekly advance on Dec. 13, the longest since February. The Japanese currency strengthened against most of its 16 major peers after global stocks declined last week, boosting demand for the currency as a haven. The Fed will probably begin reducing $85 billion in monthly bond purchases at its Dec. 17-18 meeting, according to 34 percent of economists surveyed by Bloomberg News on Dec. 6.
“There are so many combinations of things that could happen with the Fed this week,” said Derek Mumford, a director at Rochford Capital, foreign-exchange risk-management company in Sydney. “Volatility, coming toward the end of the year, there’s often some very lively moves. In stocks, bonds and currencies markets, there’s plenty of money to be made and lost.”
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