Dollar Falls before the Release of Fed’s September Minutes

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Dollar Falls before the Release of Fed’s September MinutesThe dollar declined versus the euro after Wall Street Journal speculated the Federal Reserve may use its “considerable time” language when it releases its monthly policy statement on Wednesday.

The U.S. currency declined 0.3 percent to trade at $1.2973 per euro as of 12:15 p.m. in New York after earlier advancing 0.1 percent. WSJ’s columnist Jon Hilsenrath reported that the Fed may retain its policy language for another consecutive month.

“It’s more concerns and worries about the ‘considerable time’ frame,” said Richard Cochinos, a New York-based head of Americas Group of 10 currency strategy at Citigroup Inc., told Bloomberg News. “Going in, the market was expecting a very hawkish Fed. Hilsenrath triggers a short squeeze right now.”

Taiwan’s dollar dropped by the steepest margin in five months after global funds reduced their net investment in local shares on bets the Federal Reserve may increase interest rates sooner than expected. The currency fell 0.2 percent to NT$30.160 versus its U.S. peer as of 4 p.m. in Taipei, its biggest decline since April 14.

The Taiwan’s dollar had earlier plunged to NT$30.173, its lowest level since May 28. It had earlier declined 0.2 percent in the final nine minutes of yesterday’s trading due to possible central bank intervention.

Foreign investors offloaded a net $258 million of Taiwanese stocks on Tuesday, the fifth straight daily decline. The Taiex Index touched its lowest level in one month on a closing basis.

The Taiwan dollar’s one-month implied volatility, which measures the expected shifts in the exchange rate used to set prices to options, rose 17 basis points to 3.02 percent, the highest level in three months. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com