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Fed-driven dollar rally fades, focus shifts to ECB meeting

“The greenback’s bounce faded as traders booked profits before the European Central Bank’s meeting later Thursday, where policy makers are seen discussing the timing of winding down the ECB’s 2.55-trillion-euro bond-purchase program” writes Midwest Communications Inc for The initial market reaction to the slightly more hawkish Fed tone quickly faded off, with the focus shifting to the ECB’s policy review later in the global day. The South African rand , hit lately by weak economic data, slipped to a six-month low of 13.44 per dollar on Wednesday and last stood at 13.3200 per dollar.Developing countries with large external financing needs are particularly vulnerable to rising dollar funding costs.Others reckon the policy makers may refrain from signaling changes to ECB’s stimulus program given Italy’s political plight and a recent spate of disappointing data in the euro zone.

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