Dollar Rises Third Day Versus Yen as Fed Meets; Euro Erases Loss

Bloomberg (29/10) -- The dollar rose for a third day versus the yen as the Federal Reserve holds a two-day policy meeting amid forecasts it won’t announce any major changes to its asset-purchase program.The euro erased a loss versus the dollar after European Central Bank Governing Council member Ewald Nowotny was reported as saying it’s unlikely the bank will cut interest rates further. Australia’s dollar slid after Reserve Bank Governor Glenn Stevens said it will probably be “materially lower.” The yen gained earlier versus the greenback amid improving jobs and retail sales before a Bank of Japan meeting later this week.“The dollar is showing strength across the board this morning,” Brian Daingerfield, a Stamford, Connecticut-based currency strategist at Royal Bank of Scotland Group Plc’s RBS Securities unit, said in a telephone interview. “It’s already been very well priced-in that the Fed doesn’t change policy tomorrow. With the dollar being sold off over the last couple of weeks, there could be some profit-taking and positioning ahead of the meeting.”The dollar strengthened 0.2 percent to 97.88 yen at 11:06 a.m. New York time, reversing a decline that saw it weaken as much as 0.2 percent. The greenback depreciated 0.2 percent to $1.3809 per euro after gaining 0.2 percent earlier. It has fallen 2 percent against the 17-nation currency this month. Europe’s shared currency gained 0.4 percent to 135.16 yen.A gauge of price swings among the currencies of Group of Seven nations rose. The JPMorgan G7 Volatility Index was at 7.6 percent after falling to 7.48 percent yesterday, the lowest since Dec. 21.