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Businessweek - Dollar Remains Higher After Fed Officials See Stimulus Risks
Wednesday, 08 January 2014
From: Business Week
The dollar remained higher after the minutes of the Federal Reserve’s last meeting showed officials saw diminishing economic benefits from its bond-buying program and expressed concern about risks to financial stability.
The minutes of the December gathering didn’t describe a set schedule for the pace of asset-purchase reductions after policy makers cut monthly purchases to $75 billion from $85 billion, citing improvement in the labor market. The currency rose earlier after a private report showed U.S. companies added more workers than forecast in December. The Labor Department’s nonfarm-payrolls report comes out on Jan. 10.
“The dollar is obviously going to be the story for the year, and the Fed tapering, for the first part anyway,” John Curran, senior vice-president at San Francisco-based USForex Inc., said in a phone interview before the release.
The Bloomberg Dollar Spot Index, which tracks the currency against 10 of its major counterparts, rose 0.3 percent to 1,029.79 at 2:07 p.m. in New York after gaining 0.3 percent yesterday.
Fed policy makers gather Jan. 28-29 to consider the next step in their strategy of gradually reducing the pace of purchases. They will trim buying in $10 billion increments over the next seven meetings before ending them in December, according to the median forecast in a Bloomberg News survey on Dec. 19.
Last month’s 238,000 increase in company payrolls followed a revised 229,000 gain in November that was stronger than initially estimated, according to ADP Research Institute in Roseland, New Jersey. The median forecast of 36 economists surveyed by Bloomberg was for a 200,000 advance in December.
Employers added 195,000 workers in December, down from 203,000 the previous month, economists in a Bloomberg News survey before the Labor Department nonfarm report. The unemployment rate will remain at 7 percent, a separate survey showed.
