Greenback Gains on Fed’s Decision to Scale Back Asset Buying Program Later This Year

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The U.S. dollar started the Asian trading session on Monday on a positive note, following the statement of Ben Bernanke, the chairman of Federal Reserve Bank, last Wednesday indicating that Fed might narrow down asset purchases later this year given that the U.S. economy gains momentum. Fed’s decision to trim down the bond-buying program by the end of 2013 is likely to support the greenback to a large extent.

The U.S. dollar rallied over its Japanese rival on Monday after the Tokyo elections results came out. USD/JPY saw a surge of 0.48% as it traded at 98.33 during Asian session on Monday. EUR/USD duo plummeted by 0.17% to trade at 1.3099 during late Asian session, after touching the lowest mark since June 6, 1.3090.

The New Zealand dollar slumped against the greenback on Monday session, as NZD/USD pair touched 0.7714 before strengthening at 0.7725, posting a drop of 0.21%. Financial analysts had expected the pair to gain at 0.7700 and face resistance at 0.7807.

Following the release of statement by International Monetary Fund on Friday regarding the decision to put off suspension of Greek funding and give Athens some more time until July to come up with its bailout program, most investors moved with cautiousness. Mainly because most traders were already concerned about the recent impediment in Greece’s privatization plan due from last year, which in turn is considered as a strong aspect leading to having an adverse effect on the economic reforms to be taken by the country in order to counterbalance bailout funding.

The Aussie hit the lowest mark in two years against the greenback. AUD/USD touched 0.9174 in late Asian session, before consolidating at 0.9177 to register a drop of 0.41%. As per predictions, AUD/USD would have faced resistance at 0.9313 and get support at 0.9164, the high and low of June 20 apiece.

AUD/NZD pair also slipped by 0.32% to trade at 1.1864, as the Kiwi looked better than the Australian dollar. With EUR/AUD rising by 0.38% to trade at 1.4294, the Australian dollar also slumped against its European counterpart.