The US dollar is pulling back against its major currency counterparts today, thanks in a large part to Federal Reserve expectations. Greenback is down pretty much across the board, and the dollar index has retreated from its earlier level above 81.00.
One of the biggest drivers of US dollar performance continues to be the Federal Reserve, and speculation over when tapering will begin. Even though the economic data in the United States continues to show a recovery (albeit a slow one), there are still questions about the economy’s sustainability. These are questions that will still be present when Janet Yellen takes over from Ben Bernanke as Fed Chair in a relatively short period of time.
Right now, speculation is that it will be sometime early next year that the Federal Reserve will begin tapering its asset purchases. Thoughts of tapering beginning in the fourth quarter of 2013 are being pushed off, and even the weakness in the eurozone can’t help the US dollar right now.
At 14:16 GMT the US dollar index is lower, dropping to 80.6620 from the open at 80.6910, and off an earlier high above 81.0000. EUR/USD is is up to 1.3497 from the open at 1.3488. GBP/USD is up to 1.5960 from the open at 1.5926. USD/JPY is down to 98.6800 from the open at 98.7615.
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