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UBS Says Fed Surprise on Asset Buying May Hurt Dollar (Update1)
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By Daniel Tilles

Aug. 12 (Bloomberg) -- The dollar may weaken should the Federal Reserve unexpectedly say it will keep buying assets, UBS AG said.

“A surprise on the asset-purchase front or a more dovish than expected Fed could temper expectations of a shift in sentiment, following last week’s non-farm payrolls release, and could weigh on the dollar,” Ashley Davies, a strategist in Singapore, wrote today in a report. “While we wait to see if recent events play out differently than those in the early-June episode, the dollar should continue to benefit as a safe haven amid any pullbacks in risk sentiment.”

The dollar fell 0.5 percent to $1.4226 against the euro as of 5:24 p.m. in London.

To contact the reporter on this story: Daniel Tilles in London at [e-mail]