Fed Didn’t Try to Help the Dollar Last Quarter
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NEW YORK — The Federal Reserve revealed Thursday that it took no action to support the dollar during the August-October period, when the U.S. currency touched new lows in foreign exchange trading.
It was the second consecutive three-month period that the Fed declined to support the dollar, but the central bank stressed that its inaction should not be interpreted as a sign that it is unconcerned about the decline.
Sam Y. Cross, a New York Fed executive vice president, said a decision to step in is based on a number of factors, including “the condition in the foreign exchange market and other financial markets, the size and speed of movements in foreign exchange rates, the assessment of market attitudes and sentiment and (anticipation of) the reaction to” a Fed move--as well as the broad economic and political climate.
The last time the Fed chose not intervene for two back-to-back periods was in late 1986.
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