Dollar sinks as Hilsenrath delivers a dose of the obvious

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The latest dollar selloff comes on this piece of insight from the WSJ Fedwatcher:

The Federal Reserve is on track to keep its $85 billion-a-month bond-buying program in place at its policy meeting next week.

Taking quick read through the article, there are some dovish talking points. He says the Fed could signal rates will stay closer to zero for longer by lowering the threshold for rate hikes to around 6.0% from 6.5%.

Author: Adam Button

Adam Button is the managing editor of ForexLiveâ„¢. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes there's an edge in knowing every tidbit of news. He was formerly the head of the markets team at the Canadian Economic Press and is a graduate of Ryerson University. Adam lives in Montreal, follow him on Twitter: @FX_Button.


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  1. That seems to be the theme: taper off QE and at the same time assert the long term commitment to low fed fund rates. Problem is that market would treat tapering as tightening, which is true!

  2. It has been a one way bet, Fed proclaims more easing and equities rally.
    The only thing that may change is if the markets stop doing that.
    That is the point when the wake up call sounds that QE is not doing good things for the domestic economy.
    This mornings numbers show a very sluggish if not comatose economy.
    Faith and credibility is what markets run on, once that gets shaken this thing will bust apart.
    So far the rallies on the ongoing stimulus are sustained less and less as time goes on. There has not been an adverse move, but if it does it will be big. The markets will have lost faith in the money printers.

    IMF is losing it as they believe remove QE and equities drop 40%, well what happens if it does not get removed and equities start selling off?

  3. I don’t understand why the dollar is continuing to plummet when the data/fundamentals coming out are not that dovish. Do you think the UJ support at 99.00 will be broken?

  4. it’s all paper money. apparently people front-ran the news.

  5. Perhaps the most totally BS summer market I have ever seen. Pity those who get caught wrong footed when this thing implodes.

  6. heres the chart for the dollar index –

    one more week and we’ll be under 81.00??

  7. It definitely looks like it sunny

  8. Looking at some of the Yen pairs, just seemed as if someone big was dumping CAD/JPY, UDS/JPY, EURO/JPY, and to a degree GBP/JPY this afternoon.
    Adam reported the Soc Gen thing on the bank longs on CHF
    We have had the strong early flows out of Europe, then the reversals and corresponding drop in the USDX which in the past had signaled banks pulling money out of Europe and then the Fed pouring in liquidity, which then sank the USD.
    Then for presumably unknown reasons, as Adam said stating the obvious, Hilsenrath is trotted out once again.
    We also had the IMF emphatic that the US must keep up QE and that the ECB has to get more aggressive.
    To be honest I thought the core US figures at 0% was more important then the headline which is skewed by transportation.

    All in all this shapes up as weak confidence/risk avoidance on the part of Banks and the regulators trying to ensure that everything is just really fine and don’t rock the boat if you please, we all have it covered.

    Maybe someone else has a different take on this, and makes a different scenario?


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