- POSTED: 18 Dec 2013 07:16
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The dollar slipped slightly against the euro on Tuesday as investors eagerly awaited the Federal Reserve's decision the next day on whether to begin scaling back its huge stimulus.
NEW YORK: The dollar slipped slightly against the euro on Tuesday as investors eagerly awaited the Federal Reserve's decision the next day on whether to begin scaling back its huge stimulus.
At about 2200 GMT, the euro bought $1.3765, up a notch from $1.3761 at the same time on Monday.
The dollar also fell against the Japanese currency, to 102.63 yen from 103.02 a day earlier, as did the euro, trading at 141.28 yen compared with 141.77.
Speculation was divided on the outcome of the Fed's two-day policy meeting that began on Tuesday. Some expect the Federal Open Market Committee will decide the economy is strong enough to start cutting back on the $85 billion in monthly bond purchases that have been supporting growth for a year.
Others say the FOMC will wait until the January or March meetings to taper the quantitative easing (QE) program to gather enough data showing the economy is strengthening.
"Wednesday's Federal Reserve monetary policy announcement is one of the most anticipated events of the year and expectations are running high for the first reduction in asset purchases since quantitative easing was first introduced in 2008," said Kathy Lien of BK Asset Management.
John Kicklighter, chief currency strategist at DailyFX, said that speculation about the upcoming Fed decision "has run rampant."
"The quiet in the trading conditions this past session belies a considerable dispersion in expectations that range from status quo with little guidance on stimulus plans to the introduction of a possible cap on QE to an immediate taper," he said.
The dollar also slipped to 0.8847 Swiss franc from 0.8868 franc late Monday.
However, the US currency strengthened against the pound, which was weighed down by official data showing Britain's annual inflation rate fell to a four-year low of 2.1 percent in November. The pound bought $1.6264, compared with $1.6299 the prior day.