Asian session: The dollar held its biggest gain in seven months

00:30 Australia RBA Bulletin Quarter I

The dollar held its biggest gain in seven months versus a basket of its peers after Federal Reserve policy makers signaled they’ll probably raise interest rates by the middle of next year. The Federal Open Market Committee discarded a jobless-rate threshold for considering when to increase borrowing costs and said it will look at a wider range of data. Policy makers also reduced monthly bond-buying by $10 billion to $55 billion and said in a statement it will slow purchases in “further measured steps.” Economists in a Bloomberg News survey forecast policy makers will announce an end to the program in October. Fed Chair Janet Yellen sees a “considerable time” between the end of the stimulus and the first rate increase, meaning “around six months or that type of thing,” she said at a press conference after presiding her first policy meeting.

New Zealand’s dollar led declines in developed-market currencies after data showed the South Pacific nation’s economic growth slowed in the fourth quarter and Asian stocks retreated. Data showed expansion in gross domestic product eased to 0.9 percent in the fourth quarter from a revised 1.2 percent in the July-September period.

The yuan fell for a fifth day, reaching a one-year low as the China Securities Journal said default risk of China’s corporate bonds is rising. The default risk of China’s corporate bonds increases as economic expansion and property investment growth slow, the China Securities Journal said in a front-page commentary. Companies relevant to the property sector will face a “more severe” situation of overproduction and more defaults may have an impact on banks, the commentary said.

EUR / USD: during the Asian session, the pair rose to $ 1.3840

GBP / USD: during the Asian session, the pair traded in the range of $ 1.6530-45

USD / JPY: on Asian session the pair traded in the range of Y102.25-45

UK CBI trends provides the morning's data interest at 1100GMT, with trade expected to continue to be driven by FOMC fall out, with the Ukraine situation still bubbling away in the background. US jobless claims at 1230GMT, Phila Fed and housing data at 1400GMT to provide the afternoon interest.