The dollar rebounded after hitting a low of one month on Monday against the yen. It rise against most major currencies Tuesday in Asia and early trading in Europe came ahead of the gross domestic product information for the U.S. and the results of the monetary policy meeting of the Federal Reserve scheduled for late in the week.
The rise in the dollar comes, as some traders believe there will be a lift in stock prices following Wednesday’s Fed policy meeting and subsequent announcement.
Helping the dollar further against other foreign currencies including the dollar in Australia, were comments made by Glenn Stevens, the Reserve Bank of Australia’s Governor. He said any further declines in the Australian dollar would be a surprise to him. Nevertheless, the Australian dollar to the U.S. dollar was $0.918 from an earlier $0.9207.
The Dollar Index from the Wall Street Journal, which measures the worth of the dollar against a group of different currencies, was 74.13 from the prior level of 73.908.
The dollar is also higher amongst a number of currencies in Asia. In South Korea, the dollar was up after two straight sessions of losses.
Market participants are continuing to speculate when the Federal Reserve will start its tampering off, of bond purchases and at what rate.
They are eager to grab at whatever clues come out of the policy meeting on Wednesday and key production data later on during the week, including jobs data for the U.S. on Friday.
Also making things more complicated is the growing speculation that former Secretary of Treasury Lawrence Summers is the leading candidate to take over as the chairman of the Federal Reserve when Ben Bernanke, the current Chairman steps down, as he is expected to do in January when his term expires.
Current Fed Vice Chair, Janet Yellen, is also seen as a leading candidate.