Forex - US dollar lower in Sydney afternoon trade as FOMC looms

Forex - US dollar lower in Sydney afternoon trade as FOMC looms

	Published : Wed, 09 May 2007 05:25 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - The US dollar was down against the yen and euro in afternoon trade here as investors looks toward tonight's Federal Open Market Committee meeting and the central bank's outlook statement for its next key lead, dealers said.

At 1:54 pm (0354 GMT) here, the dollar was at 119.78 yen from 119.95 in morning trade while the euro was at 1.3544 usd, up slightly from 1.3542 earlier.

NAB Capital strategists said the Federal Reserve is widely expected to keep interest rates steady tonight but there will be much interest in the statement and whether the central bank gives any indication if its views on risks to growth and inflation are changing.

'While recent Fed rhetoric has been relatively upbeat, with US gross domestic product growth falling below 2.0 pct and ore PCE inflation sliding from 2.4 pct to 2.1 pct, we can't see the FOMC sounding too hawkish on interest rates,' they said.

Meanwhile, the strategists noted the Australian dollar has performed strongly over the past 24 hours with data released yesterday showed retail sales in March rose a solid 1.2 pct from February. The local unit is also seeing support from the fiscal stimulus measures announced in last night's federal budget and the possibility of more to come ahead of the election in October/November.

NAB said further gains in the Australian dollar towards 0.8400 usd will depend on the FOMC statement and the Australian jobs report for April due tomorrow at 11.30 am Sydney.

'Any dovish message from the FOMC statement overnight and a solid Australian jobs report Thursday could see the Australian dollar finish the week above 0.8350 usd,' the strategists said.

Sydney 1:54 pm (0354 GMT) vs Sydney 9:55 am (2355 GMT)

US dollar

119.78 yen vs 119.95 yen

1.2179 sfr vs 1.2182 sfr

Euro

1.3544 usd vs 1.3542 usd

162.23 yen vs 162.43 yen

1.6493 sfr vs 1.6497 sfr

0.6804 stg vs 0.6805 stg

Sterling

1.9905 usd vs 1.9896 usd

238.39 yen vs 238.72 yen

2.4240 sfr vs 2.4238 sfr

Australian dollar

0.8285 usd vs 0.8272 usd

0.4163 stg vs 0.4159 stg

99.250 yen vs 99.230 yen

New Zealand dollar

0.7362 usd vs 0.7349 usd

paul.daniel@xfn.com