The dollar was moderately lower during Wednesday’s Asian session, more likely due to traders waiting eagerly for the Federal Reserve announcement later on Wednesday that as a reaction to U.S. President Donald Trump’s first State of the Union address on Tuesday night. During his speech, Trump discussed the strength of the U.S. economy, gave himself a healthy pat on the back for his recently-passed tax cut bill, and focused on the need for optimism, as well as his continued plans for deregulation. Trump also mentioned the need to work towards a compromise on immigration issues and his intent to invest $1.5 trillion in infrastructure. The overall messages were positive, but still, Trump was criticized for lacking the ebullience and positive energy that pundits expected.
The dollar index was 0.28 percent lower, to 8894 .DXY as the greenback eased against most of its primary trading partners on Wednesday. The dollar eased 0.34 percent against the euro to trade at $1.2442 as of 2:42 p.m. HK/SIN. The dollar was also down 0.08 percent against the yen, trading at 108.69, after hitting a high of 109.095 after the Bank of Japan announced its intention to increase its purchase of medium-term Japanese government bonds, a move that was meant to warn against continued increases in bond yields. The though BOJ has said that changes to its bond-buying policy are merely meant to fine-tune the policy but not meant to hint towards future measures, many analysts are still interpreting the purchase deeply, and are wondering whether the BOJ will maintain its monetary stimulus plan in the near term, even after BOJ Governor Haruhiko Kuroda noted the need to implement monetary easing policies earlier this month.
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