Fresh high in EUR/USD and a fresh low in USD/JPY
The comments from Dudley are still doing the rounds, here's the verbatim of what he said:
"I do think I expect inflation to also start to move higher in the medium term but probably not get all the way back to 2 percent on a year-over-year basis, because remember, we've had these very weak inflation readings for a number of months," he said. "We're not going to get to a year-over-year number of 2 percent until some of these very low readings drop out of the statistics 6 to 10 months from now."
So he didn't say -- exactly -- that he doesn't expect inflation to hit 2% in the medium term and that's important to note after the earlier confusion.
What's doing the damage to the dollar is the drop in the stock market. The S&P 500 is down 28 points to 2446, which is the worst day in a long time. The bond market isn't freaking out with 10-year yields down just 2.5 bps to 2.22%.
Technically, there isn't much to help USD/JPY here.
