Dollar Erases Losses After Williams Says Fed May Taper PurchasesJoseph Ciolli and John Detrixhe
The dollar erased losses versus the yen and euro after Federal Reserve Bank of San Francisco President John Williams said the central bank may begin tapering as early as this summer the pace of its bond purchases.
The greenback fell earlier from an almost four-year high versus the yen after weaker-than-forecast reports on U.S. unemployment claims, housing and inflation damped bets the Fed will slow its bond buying under the quantitative-easing stimulus strategy. South Africa’s rand slid to the weakest since 2009 on concern the nation’s economic growth will falter.
“He’s hinted at possibility of tapering QE already,” Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York, said of Williams in a telephone interview. “But I think it still adds fuel to the fire. Markets have been focusing on tapering, and this remark will certainly be noted.”
The dollar was little changed at 102.22 yen at 4:16 p.m. in New York after falling as much as 0.4 percent earlier. It touched 102.76 yen yesterday, the strongest level since October 2008. The U.S. currency traded at $1.2884 per euro after weakening 0.3 percent earlier.