The U.S. Dollar gained traction as FX traders waited for some guidance from the Federal Reserve Bank in regards to the possible timing of its next rating hike, and the steps it will take towards normalizing the current and historical loose policy. Later today, the FOMC will be releasing a statement after which the Fed chief, Janet Yellen, will hold the obligatory press conference. Investors will have their best opportunity to glean what the Fed’s future direction will be from this press conference. However, the Wall Street Journal yesterday spooked investors by saying that the Fed might include language such as, “considerable time”, which would be an indication that a rate increase would be farther away than anticipated.

As reported at 8:53 a.m. (BST) in London, the EUR/USD was trading at 1.2964, just shy of the day’s high but within a relatively tight trading band. Meanwhile the USD/JPY was up at 107.3350 Yen, near midpoint of the day’s trading range; earlier the Dollar had edged beyond last Friday’s 6-year high breaking through at 107.40 Yen. The AUD/USD was lower at 0.9064, just off the session low.

Aussie Recovers on PBOC News

The Aussie Dollar had earlier managed to rally against the greenback, gaining almost 1% to a peak of $0.9112 before falling back. Over the past week, the Aussie had lost nearly 4% on data which showed that China’s growth was declining, with lowered future forecasts. However, it was reported that the Peoples Bank of China would be providing additional liquidity to key banks in order to boost lending in the country.