USD Gains A Bit As Oil Price Decline

1440 GMT [Dow Jones] USD is reversing some of its modest losses against the euro as US oil stockpiles rise, causing global oil prices to decline. But USD ranges are holding as markets wait for the FOMC statement in the afternoon. Recently, EUR/USD was at 1.5586 from 1.5572 late Tue, while USD/JPY was at 108.02 from 107.79. (DKM)

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June 25, 2008 10:40 ET (14:40 GMT)

FOMC:Meeting Begins At 9:00 AM ET As Scheduled

2008.06.25 15:01:07 *FOMC:Meeting Begins At 9:00 AM ET As Scheduled

2008.06.25 15:02:09 FOMC Resumes 2-Day Meeting At 9:00 AM EST, As Scheduled

WASHINGTON (Dow Jones)--The Federal Open Market Committee resumed its two-day meeting at 9:00 a.m. EDT Wednesday, as scheduled, a Federal Reserve spokeswoman said.

Following the meeting's conclusion, the committee is expected to announce any decision it makes on short-term interest rates and issue an accompanying statement on the economy at about 2:15 p.m. EDT Wednesday.

With the FOMC widely-anticipated to hold the fed funds rate steady at 2.00%, the statement will be scrutinized even more than usual for any hint of the central bank's next step.

From September to April, the Fed aggressively cut the short-term interest rate target by 3.25 percentage points to just 2% in effort to prevent the economy from tipping into recession. A housing market rocked by widespread foreclosures has been weighing on the economy as well as a related credit crunch.

At the same time, central bankers around the globe have recently raised greater concern about high energy and food prices and their impact on inflation expectations. Fed watchers see policymakers trying to reflect those greater inflation concerns in the statement - without signaling that rate hikes are imminent.

-By Maya Jackson Randall; Dow Jones Newswires; 202 862 9255; maya.jackson-randall@dowjones.com

Corrected June 25, 2008 09:34 ET (13:34 GMT)

(END) Dow Jones Newswires

June 25, 2008 09:02 ET (13:02 GMT)

USD Sticks To Narrow Range Ahead Of FOMC

1210 GMT [Dow Jones] USD declined slightly against the euro but rose versus the yen, staying within a narrow range ahead of the FOMC interest rate announcement, scheduled at 2.15 p.m. EDT. Even hawkish remarks from ECB president Trichet only gave the euro a slight boost. But before the FOMC meeting closes, the market will also take notice to the release of May durable goods at 8.30 a.m. EDT, followed by May new home sales at 10 a.m. EDT. Wed morning in NY, EUR/USD was at 1.5590 from 1.5572 late Tue, while USD/JPY was at 107.96 from 107.79. EUR/JPY was at 168.33 from 167.86 late Tue, according to EBS. GBP/USD was at 1.9723 from 1.9697, and USD/CHF was at 1.0403 from 1.0412. (YUS)

Contact us in New York. Darlene Ross, 201 938-2085

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June 25, 2008 08:11 ET (12:11 GMT)

European Summary

Bond futures contracts drifted in light, rangebound trading Wednesday as markets braced for the FOMC interest rate decision, due 1815 GMT. ECB president Trichet's testimony before the EU parliament provided a brief flurry of activity. September bunds printed a session low after Trichet voiced conazcern that high inflation in the euro zone was becoming entrenched. Trichet later clarified his comments. While not ruling out a rate hike at next week's ECB meeting, Trichet reiterated he didn't envisage a series of rate hikes.

At 1100 GMT, the September bund contract was down 0.18 at 110.40, within a 110.23-110.51 range, while December euribor was unchanged at 94.75. Gilts outperformed bunds, with muted reaction to CBI retail sales volume data, -9 in June from -14 in May, versus forecast -17. At 1100 GMT, September gilts were unchanged at 104.18, in a 103.91-104.20 range, while December short sterling was up 0.035 at 93.75. The FX market took a very hawkish Trichet, with backup comments from ECB's Noyer and Tumpel-Gugerell as a sign that a rate hike next week is a done deal.

EUR/USD held close to the day's high of 1.5602 in the aftermath. The greenback also slipped against sterling, thanks in part to the CBI survey with GBP/USD comfortably back above 1.97. JPY continues to underperform, a positive session for stocks [Europe +0.3% to +0.8%] encouraged risk appettite, EUR/JPY traded just shy of Monday's 11 month 168.38 high while USD/JPY holds just under 108.00. Oil hovers around $137bbl.

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June 25, 2008 07:59 ET (11:59 GMT)