Forex - Dollar regains some ground in Sydney afternoon trade after FOMC meeting

Forex - Dollar regains some ground in Sydney afternoon trade after FOMC meeting

	Published : Thu, 22 Mar 2007 04:40 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - The US dollar was slightly higher against the yen and euro in midafternoon trade as market players continued to digest the statement from the US Federal Open Market Committee meeting which concluded overnight, dealers said.

At 2.08 pm (0308 GMT) here, the dollar was at 117.51 yen, up from 117.42 in morning trade while the euro eased to 1.3386 usd from 1.3389 earlier.

Dealers said although the Federal Reserve kept its target funds rate unchanged at 5.25 pct as widely expected, the altered wording in its outlook statement will give the market food for thought going forward.

The FOMC statement scrapped past language about the potential for further rate hikes ahead and firmer economic growth, but at the same time it again voiced concern about possible upside risks to inflation.

'Policy concern remains the risk that inflation will fail to moderate as expected,' the statement noted.

GFT analyst Ian Copsey said while the first impression from the statement appears to be US dollar bearish, it would be wise to take a cautious approach to the currency.

On the dollar/yen currency pair, he said the depth of recovery from Tuesday's 116.91 yen lows was exceptionally deep but until the 118.01-118.20 usd level is broken the bias still seems to be on the downside for the greenback.

Dealers said the next focus for the market will be tonight's speeches by Federal Reserve officials, as well as the US leading index for February.

Sydney 2.08 pm (0308 GMT) vs Sydney 9.59 am (2259 GMT Wednesday)

US dollar

117.51 yen vs 117.42 yen

1.2097 sfr vs 1.2091 sfr

Euro

1.3386 usd vs 1.3389 usd

157.25 yen vs 157.19 yen

1.6193 sfr vs 1.6187 sfr

0.6802 stg vs 0.6805 stg

Sterling

1.9630 usd vs 1.9631 usd

231.21 yen vs 231.04 yen

2.3805 sfr vs 2.3795 sfr

Australian dollar

0.8064 usd vs 0.8088 usd

0.4098 stg vs 0.4109 stg

94.745 yen vs 94.940 yen

New Zealand dollar

0.7087 usd vs 0.7107 usd

paul.daniel@xfn.com