Dollar strong as Fed ends QE programme

Published: 30 Oct at 11 AM Tags: Euro, Dollar,

The dollar has hit a three-week high after the US Federal Reserve brought to an end its quantitative easing programme. The bond-buying strategy had been in place for six years. The central bank’s decision had been widely expected. On Wednesday the Fed issued a statement that confirmed borrowing rates would remain low for the foreseeable future.

Against the yen the dollar recovered a third of a per cent to trade at 109 yen and was up half a per cent against the euro at $1.2575. The equity markets in Europe saw the statement by the Fed as positive and an indication that the world’s top economy is well on the road to recovery.

In Asia shares were slightly down following an overnight decline on Wall Street. Even though the European houses opened on a positive note they also ended on a decline.

US Treasury yields have surged to their highest level in three weeks and are currently hovering around 2.33 per cent.

Gold is trading just above $1,200 per ounce, the lowest the precious metal has been in three weeks. Gold usually performs badly when the dollar is strong. Oil is also down by around one percent. Brent crude dropped to $86.42 per barrel and US crude fell to $81.40.