The U.S. dollar climbed against most of 16 major counterparts after the Federal Reserve decided to slow stimulus that’s seen to have debased the U.S. currency, reinforcing prospects the world’s largest economy is improving.
Traders’ expectations for currency swings slid for a third day after the Fed underscored its commitment to keeping borrowing costs lower for longer. The yen rebounded against the dollar after its biggest slump in more than four months. The Bank of Japan policy makers start a two-day meeting today. The euro fell before European Union leaders meet today to discuss a planned banking union.
“With the reduction in quantitative easing, the Fed has bought a ticket to enter into a normalization of monetary policy,” said Masato Yanagiya, the New York-based head of foreign exchange and money trading at Sumitomo Mitsui Banking Corp., referring to the central bank’s asset purchases.
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