2010.09.2006:49:00UTC+00Dollar slips before Fed meeting, AUD rallies after RBA's Stevens comments

News

• The dollar slipped broadly on speculation the Federal Reserve may flag the need to inject more stimulus into the struggling U.S. economy when it announces its latest policy decision on Tuesday.
• The Fed is widely expected to refrain from implementing new steps to ease monetary policy on Tuesday, while renewing its promise to keep its portfolio of assets from shrinking.
• By 0948 GMT, the U.S. currency fell 0.4 pct against a currency basket, taking the dollar index down to 81.046 near a five-week low hit last week.
• The dollar traded at 85.70 yen, barely moved after Japan massively sold yen for dollars last week to curb yen strength.
• Further dollar gains were capped by its 55-day moving average, which came in at 85.88 yen and investors were focused on whether the dollar would break above 86.00 yen.
• A sluggish U.S. recovery has stung the dollar in past months as it has raised the possibility of more quantitative easing, but analysts say recent data hardly suggests a double-dip recession.
• Many expect that the Fed will lay off any policy loosening for now, and some say the biggest risk heading into the Fed meeting is for an upward dollar correction.
• The Australian dollar rose more than 1 pct to $0.9470 after RBA Governor Glenn Stevens suggested Australian rates would continue to rise.
• The euro rose 0.4 pct to $1.3090.