Dollar edges lower on taper speculation

The dollar has edged lower in forex trading markets today (December 17th), before the beginning of the Federal Reserve's two-day policy meeting. 

With speculation continuing to mount that the US central bank will announce a reduction in its quantitative easing programme following this gathering, the greenback has edged lower against both the euro and the yen.

The European single-currency continues to receive support following the solid purchasing managers' index data released yesterday, which showed the region's output increased to its highest level in three months in November. 

As a result, it is thought the European Central Bank will hold off on introducing further stimulus in the near future, having recently cut interest rates to the record low of 0.25 per cent.

US inflation data is set to be released later in the session and it is thought this will have an influence on the Fed's decision, with a subdued figure likely to encourage the bank to maintain its asset purchases into the new year.