FOREX-Dollar up on Fed taper view, Canadian dollar sinks to 4-year low

Tue Jan 21, 2014 11:06am EST
 
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* Dollar supported by expectations for more Fed tapering

* WSJ says Fed may announce further tapering next week

* Euro slips after German ZEW survey

* Canadian dollar drops to 4-year low vs USD

* IMF raises global economic growth forecasts

By Daniel Bases

NEW YORK, Jan 21 (Reuters) - The dollar strengthened on Tuesday in tandem with U.S. Treasury yields, which rose on speculation the Federal Reserve would soon reduce its bond-buying stimulus further.

Developed market currencies were given a boost after the International Monetary Fund raised its global economic growth forecast to 3.7 percent in 2014 from 3.6 percent in October, its first increase in estimates in near two years.

Sterling gained 0.18 percent to $1.6460, following the IMF's forecast, which boosted Britain's growth forecast to 2.4 percent this year from the prior forecast of 1.9 percent. U.S. growth is now seen rising 2.8 percent rather than 2.6 percent.   Continued...