The dollar slid to a three-week low against the yen before data tomorrow that economists said will show U.S. retail-sales growth slowed, strengthening the case against faster tapering by the Federal Reserve.
Andrew Wilkinson is calling for a $5 billion reduction in the monthly bond purchases that are part of QE3 at today’s “penultimate FOMC meeting.” He does point out that a tapering is not the prevailing wisdom.
The dollar gained versus the yen after a report showed the U.S. added more jobs last month than forecast, signaling the Federal Reserve may reduce monetary stimulus that’s seen as debasing the currency.
When U.S. financial markets finished their temper tantrum over the Federal Reserve acknowledging that QE3 would have to end, the prospects of more rational market fundamentals emerged. But as we enter 2014, markets appear stuck on taper.
The dollar fell against most of its major peers as Secretary of State John Kerry said the U.S. will explore a Russian proposal for Syria to turn over its chemical weapons while seeking approval for military strikes.