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Dollar stable in Asia ahead of Fed meeting

Dollar stable in Asia ahead of Fed meeting

TOKYO: The US dollar was steady in Asia on Wednesday as traders eye the outcome of a Federal Reserve policy meeting later in the day.

The greenback fetched 108.12 yen in afternoon Tokyo trade against 108.16 yen in New York. The euro was nearly flat at $1.2737 from $1.2733 and 137.73 yen against 137.74 yen.

Currency markets were stuck in neutral ahead of an announcement by the US Federal Open Market Committee (FOMC) later Wednesday following a two-day meeting.

The Fed policy-setting committee was widely expected to end its six-year-old quantitative easing programme, but investors were watching closely to see if the central bank offers any new information on raising interest rates.

Policymakers have suggested the first hike in the federal funds rate, pegged at a range of zero to 0.25 percent since late 2008, could come in mid-2015, as the world´s top economy gathers pace.

“All eyes will be not only on the description of the economy in the body of the statement and the FOMC´s forward guidance. It seems likely they´ll retain their view that it will be a ´considerable period of time´ before rate lift-off,” National Australia Bank said in a note.

Earlier Wednesday, fresh data showed that Japan´s September factory production posted its biggest rise in eight months, but the news failed to dispel doubts about the strength of the wider economy following a recent string of weak figures.

Worries about the Japanese economy have boosted speculation that the Bank of Japan, which holds a policy meeting Friday, will have to expand its stimulus sooner than later, which would tend to weaken the yen.

In a rare piece of upbeat news for the eurozone, the European Commission said Tuesday it had found no serious fault with eurozone member states´ 2015 budget plans, clearing France and Italy after they made last-minute changes to meet EU demands.

That came as the European Central Bank´s chief economist said in a newspaper interview that he saw no signs of deflation or recession in the single currency area.

The dollar was mixed against other Asia-Pacific currencies on Wednesday afternoon. It rose to 32.50 Thai baht from 32.44 baht on Tuesday, and to 12,152 Indonesian rupiah from 12,147 rupiah.

The dollar inched down to Tw$30.36 from Tw$30.39, to 61.28 Indian rupees from 61.36 rupees, to 44.71 Philippine pesos from 44.78 pesos, to Sg$1.2724 from Sg$1.2740 and to 1,047.45 South Korean won from 1,049.80 won.

The Australian dollar rose to 88.66 US cents from 88.17 cents while the Chinese yuan was at 17.66 yen against 17.61 yen.