Dollar Steadies Slightly Against Euro, Yen

The United States of America Dollar steadied on Wednesday, June 14, ahead of a Federal Reserve policy statement widely expected to raise interest rates for the third time in six months but also to signal doubts over how soon it may make its next move.

The greenback, against the euro and yen, the greenback was roughly steady but it saw solid losses for a second day against the commodity bloc of currencies, all of which have benefited from a surge in expectations of higher Canadian interest rates. On Wednesday, the dollar index .DXY barely budged as slightly firmer moves against the euro EUR= and yen JPY= were offset by losses against the commodity bloc of currencies, such as the Australian and Canadian dollars. Worries about the pace of global growth and weakness in markets for the commodities they produce drove a 5 percent slide in the values of both Australia’s and Canada’s dollars between March and May, Reuters reports.

However, after comments by Bank of Canada Deputy Governor Carolyn Wilkins on Monday flipped markets towards an earlier rise in borrowing rates there, traders and analysts say bets against the bloc have looked exposed. By 0743 GMT in London, the Canadian, New Zealand and Aussie dollars were all a quarter of a percent higher on the day against their U.S. counterpart at respectively C$1.3209, $0.7237 and $0.7558. Added to another cautious recovery for sterling, that left the dollar index 0.04 percent weaker on the day at 96.936.