Oct. 30 (Bloomberg) -- The dollar rose against most major peers after the Federal Reserve said it sees economic improvement even as it plans to maintain stimulus as it awaits further gains.
The greenback fell earlier before Fed policy makers ended a two-day meeting. The Standard & Poor’s 500 Index of stocks has rallied to record levels this month and Treasury 10-year yields had dropped amid speculation the central bank will delay reducing its bond-buying under the quantitative-easing stimulus strategy.
"They said they’re still seeing improvement in economic activity and labor market conditions, which is why we saw the dollar rebound," Eric Viloria, a senior currency strategist at Gain Capital Group LLC in New York, said in a phone interview. "But the trend is still for dollar weakness as they maintain the pace of QE."
The dollar gained 0.3 percent to $1.3714 per euro at 2:25 p.m. New York time after weakening 0.2 percent earlier. The greenback climbed 0.4 percent against to 98.55 yen.
The Bloomberg U.S. Dollar Index, which monitors the greenback against 10 major counterparts, rose 0.2 percent to 1,008.41, erasing an earlier loss.
"Taking into account the extent of federal fiscal retrenchment over the past year, the committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program as consistent with growing underlying strength in the broader economy," the Federal Open Market Committee said in a statement. It repeated it will "await more evidence that progress will be sustained before adjusting the pace of its purchases."
The Fed buys $85 billion of Treasury and mortgage securities a month to push down borrowing costs and spur economic growth, a move that tends to debase the dollar.
Weaker-than-forecast consumer-price data today gave the central bank more flexibility to maintain stimulus. The cost of living rose 1.2 percent in the 12 months through September, the least since April, the Labor Department reported. A Bloomberg survey estimated a 1.8 percent increase. The Fed’s inflation target is 2 percent.
American companies hired fewer workers than projected this month, another report showed. Businesses added 130,000 jobs, the Roseland, New Jersey-based ADP Research Institute said, versus a Bloomberg forecast of 150,000.