The yen and Swiss franc strengthened as Asian stocks fell, boosting demand for safer assets before the Federal Reserve announces its policy decision today.
Japan’s currency rose toward the strongest level in a month versus the dollar. Fed Chairman Ben S. Bernanke said this month a reduction in the central bank’s bond-buying program would depend on the economy’s performance. Analysts predict a U.S. report today will show gross domestic product grew at a slower pace. The Australian dollar weakened for a third day on speculation the Reserve Bank will cut interest rates.
“Equities are in the red, sentiment has been a bit weak and that’s supporting the yen,” said Arne Rasmussen, head of currency research at Danske Bank A/S (DANSKE) in Copenhagen. “People are waiting for the Fed. The risk is that they will include a bit more guidance on the timing and the pace of tapering. Before that we have the GDP numbers, which could be on the weak side.”
The yen rose 0.2 percent to 97.82 per dollar at 9:35 a.m. London time after appreciating to 97.64 on July 29, the strongest since June 27. Japan’s currency was little changed at 129.98 per euro. The euro climbed 0.2 percent to $1.3291.
The franc advanced 0.3 percent to 92.68 centimes per dollar and rose 0.1 percent to 1.23167 per euro.
The Aussie weakened 0.3 percent to 90.39 U.S. cents after dropping to 90.08 cents, the lowest since July 12.
Charts: WorldWideMarkets Flash Trader