Yellen said nothing, why did the dollar move?
All week we waited for Janet Yellen's Jackson Hole comments. In the end, she said nothing at all. The Fed chair spoke about regulation in a speech that was more-or-less a retrospective. She said nothing about the outlook for the economy or monetary policy.
The drop in the US dollar after Yellen was all about momentum. The reason it fell is because it would have fallen anyway, or it would have been lower already if not the risks from the speech. The minutes before the release of the text were telling: the dollar rose in that time.
That's a sign that US dollar shorts were covering in the countdown. In turn, that shows the market was worried Yellen would say something hawkish.
What happened with the text was released? Yellen didn't say anything hawkish. So the market resumed doing what it was doing before -- selling the US dollar. Those who got out of the way to trim risks got back into the trade afterwards.
