Dollar moves higher against yen with Fed in focus

Shutterstock photo - - The dollar was higher against the yen on Tuesday as expectations that the Federal Reserve will continue to scale back stimulus measures this week underpinned dollar demand.

USD/JPY hit highs of 102.99, and was last up 0.34% to 102.89, recovering from Monday's seven week lows of 101.76.

Investors were anticipating Wednesday's policy statement by the Fed amid expectations that the bank will cut its asset purchase program by another $10 billion, to $75 billion per month. The central bank announced the first cut to its stimulus program in December.

Concerns over the impact of the Fed tapering stimulus, along with fears over a possible slowdown in China fuelled a broad based selloff in emerging currencies in recent sessions.

Sentiment on emerging market currencies remained fragile ahead of an emergency meeting of Turkey's central bank later Tuesday. Turkey's lira spiraled to new lows against the dollar on Monday, sparking widespread risk aversion.

Elsewhere, the euro slipped lower against the dollar, with EUR/USD dipping 0.08% to 1.3662.

GBP/USD edged up 0.08% to 1.6595 ahead of preliminary data on U.K. fourth quarter growth due for release later in the session, which was expected to show that the economy grew 0.7% in the three months to December.

USD/CHF was up 0.20% to 0.8979.

The Australian dollar was higher against the U.S. dollar, with AUD/USD rising 0.70% to 0.8800 as expectations for another rate cut by the Reserve Bank diminished after data showed that business conditions rose to a two-and-a-half year high in December.

National Australia Bank said its monthly business conditions index rose to four in December from a reading of minus three in November, as low interest rates, higher house prices and a weaker exchange rate boosted sales and profitability.

NAB's separate business confidence index was unchanged at six in December.

NZD/USD was up 0.68% to trade at 0.8288, tracking gains in the Australian dollar.

The Canadian dollar was steady against the U.S. dollar, with USD/CAD dipping 0.07% to 1.1007, holding below the four-and-a-half-year highs of 1.1172 reached last week.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.09% to 80.65. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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