Dollar Rebounds Strongly on Interest Rate Bets

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Dollar Rebounds Strongly on Interest Rate BetsThe dollar rebounded from a four-week low versus the yen on wagers the Federal Reserve officials may do away with their stance of retaining interest rates at record lows for a “considerable time” in their statement due today.

The greenback surged 0.8 percent to trade at 117.34 yen as of 11:17 a.m. in New York after dropping to 115.57 on Tuesday, its weakest level since Nov. 17. The dollar surged 0.8 percent to trade at $1.2412 per euro, while the yen remained slightly unchanged at 145.64 per euro after advancing 1.6 percent over the past two days.

The euro mainly lost ground after a European Central Bank policy maker was quoted by Wall Street Journal as saying officials were mulling possible stimulus.

“The Fed will adjust language to the hawkish side,” John Hardy, a Hellerup, Denmark-based head of foreign-exchange strategy at Saxo Bank A/S, emailed Bloomberg News. “The ECB comment suggests higher odds than perhaps the market perceived for more definite news at bank’s January gathering”.

Falling Brent crude prices, which traded below $60 at $56.21 per barrel in New York, sent the Nigerian naira on a free fall. Nigeria, which is Africa’s biggest oil producer, obtains 70 percent of its revenue and nearly all its export revenue from oil. The naira fell 4 percent to trade at 187.05 versus the dollar, an all-time low since records began in 1999.

The Russia’s ruble rebounded after the Bank of Russia rolled out interventions aimed at steadying the financial system. The ruble advanced 7.4 percent to trade at 62.50 against the dollar after touching a record-low of 80.10 on Tuesday. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com