US Dollar Gains Ground on Boost from Fed Speculation

Once again, speculation about what’s next for the Federal Reserve is driving the US dollar in Forex trading. This time, it’s speculation that the Fed could actually begin tapering its asset purchases by the end of the year.

US dollar is getting a boost today, heading higher against most of its major counterparts as speculation begins anew that the Federal Reserve could decide to start tapering its asset purchase program by the end of the year.

Indeed, after a round of reasonably positive economic data, there are thoughts that the Federal Reserve will see at least some reason to start stepping down its asset purchases. Even if the Fed does begin its taper by the end of the year, the reality is that the Fed probably won’t take drastic steps, and the step down won’t be that big. Forex traders are also speculating on what happens when Janet Yellen takes over as Chair.

However, just the thought that a taper might be coming is enough to help boost the US dollar against other currencies today. It’s not a big boost, but it’s enough for now.

At 15:29 GMT the US dollar index is up to 80.8930 from the open at 80.6390. EUR/USD is down to 1.3548 from the open at 1.3581. GBP/USD is down to 1.6370 from the open at 1.6372. USD/JPY is up to 1022.9200 from the open at 102.5145.

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