The Dollar rose from a two week low against the yen on Tuesday, as
investors brushed off China's stock market rout and focused instead on
the possibility of a 2015 U.S. interest rate rike ahead of the start of a
Federal Reserve meeting.The safe haven Japanese currency had gained on
Monday as Shanghai stocks tumbled 8.5 percent their biggest one day drop
in eight years and commodity prices slid, dragging down European and
U.S. shares and dampening demand for the dollar as investors worried
about global growth.But although Chinese equities fell again on Tuesday,
the decline was more modest, while broader share markets managed to
edge up as investors took on more risk.The dollar gained a third of a
percent to 123.66 yen, up from its low of 123.01 yen on Monday.
Snapping its four day losing streak, rupee advanced 7 paise to 64.09 per against dollar in early trades today. The local currency had closed at a fresh six week low of 64.16 on Monday amid persistent demand for the greenback from banks and importers. All eyes were on the US Federal Reserve's two day meet beginning later in the day. Cues on when the US apex bank will start raising interest rates will be a key factor that may drive dollar movement in the near future. "While our US economists expect a September rate hike, they think that the FOMC statement would emphasize data dependence and eschew any overt signals about the timing of liftoff," said BofAML in a research note.
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