“It seems extremely likely Greece will be getting its next tranche of aid,” Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York, said in a telephone interview.
The dollar advanced versus the euro as the Ifo institute in Munich said German business confidence dropped to the lowest level in more than two years.
“I’m quite impressed with the resilience of the euro,” Alan Ruskin, global head of Group-of-10 foreign-exchange strategy at Deutsche Bank AG in New York, said in a telephone interview. “The last time equities were trading at these type of levels, the euro was trading at the $1.26 area.”
The Fed said in a statement after a two-day policy meeting that the economy is still growing modestly and unemployment remains elevated.
The central bank said its bond-buying will continue, and it maintained a pledge to hold interest rates at virtually zero until at least mid-2015. It also said a program to lengthen the average maturity of its holdings will remain in place until year-end, when it’s scheduled to expire. The effort is called Operation Twist
The greenback fell 0.7 percent against the euro on Sept. 13 after Fed policy makers announced following their last meeting a third round of large-scale asset purchases and said the buying would continue until the economic recovery is well-established. Two previous rounds of quantitative easing totaling $2.3 trillion failed to breathe life into the labor market.
Sixty-eight percent of 60 economists surveyed by Bloomberg News said the Fed chairman’s third round quantitative easing will last until January 2014.
Operation Twist, a separate program, is designed to hold down borrowing costs by lengthening the average maturity of the Fed’s holdings. The central bank swaps short-term debt in its portfolio for longer-term Treasuries.
The Dollar Index fluctuated after a report showed sales of new homes in the U.S. rose to a two-year high in September. The gauge, which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six major U.S. trade partners, was little changed at 80.027 after rising for the past four days. It was at 79.974 today after losing as much as 0.2 percent and gaining 0.2 percent.
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