Asian session review: US dollar declines ahead of Fed's meeting

During today's Asian trading, the US dollar fell to a four-month low against the yen and updated a minimum of 22 months against the euro due to expectations that the Federal reserve (Fed) may signal an increase in economic stimulus.

The Fed's July meeting will be held on Tuesday and Wednesday. Analysts do not expect any high-profile statements from the Central Bank, but believe that the Fed's leadership may begin to prepare the ground for new measures that may follow in September or in the fourth quarter.

Also, the Central Bank can send a clearer signal about the advantages of the average inflation target, and this will keep rates low for a long time.

Some analysts note that if inflation accelerates, Fed officials may allow the economy to remain in a state of overheating for a long period of time.

Speculators increased the total value of net short positions in dollars for the week ending July 21 to $18.81 billion from $16.65 billion a week earlier.

The ICE Dollar index, which shows the value of the dollar against six major world currencies, fell by 0.56% relative to the previous day.