Dollar Keeps Gains After Tapering

The US dollar maintained gains against most of its major peers today as the Forex market was digesting the Federal Reserve policy announcement. The currency fell against the Japanese yen intraday, but recovered later.

The Fed announced yesterday that it is reducing the size of its monthly asset purchases from $85 billion to $75 billion per month. The dollar surged on the news and the rally has not lost momentum still despite worse-than-expected macroeconomic data from the United States. Existing home sales fell in November and unemployment claims rose last week, but this did not affect the US currency very much.

The Bank of Japan has started a two-day monetary policy meeting today and will announce its decision tomorrow. The yen was rallying ahead of the announcement, but the dollar was able to hold ground against the Japanese currency.

EUR/USD dropped from 1.3682 to 1.3654 as of 23:58 GMT today. USD/CHF advanced from 0.8937 to 0.8981. USD/JPY was down from 104.26 to 103.77 intraday, but bounced to 104.29 later.

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