From a low of 82.047 on Monday, the dollar index, DXY has risen to 82.217. It may be a meager 0.1% rise but the recovery came after a month-long low against various currencies. However, debate still continues on whether the Federal Reserve would continue with its stimulus measures. U.S. Federal Reserve Chairman Ben Bernanke had earlier reiterated that the central bank would continue to buy bonds. No smooth sailing is also expected in the near future as the Fed Chairman has also stated that the "U.S. rates are likely to remain low," according to a Reuters report.
The head of FX research at Barclays in New York, Jose Wynne, observed: "After reactions and overreactions, global markets seem now to have learned that tapering does not mean hikes.This looks about right. Hence, we expect participants to look into fundamentals to learn about future directions."
Analysts have also predicted that the dollar will hold up against the euro, sterling, and the yen in the coming months, but the rise is expected to be a bumpy one.
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