By Hao Li: Subscribe to Hao's RSS feed
October 26, 2011 5:10 PM EDT
Despite an elevated level of risk aversion – and the fact that the source of the risk is the European debt crisis – the euro remains “surprisingly resilient” against the safe-haven U.S. dollar, said Samarjit Shankar, managing director at Bank of New York Mellon.
Indeed, since Sept. 1, the euro has only declined 3.3 percent against the U.S. dollar.
In fact, BNY Mellon’s iFlow FX indicators show that the U.S. dollar is currently the “strongest net sold across all developed market currencies.”
Currencies that are seeing net inflows include the euro, Australian dollar, Canadian dollar, and Norwegian krone.
“The key drivers in global foreign exchange markets has been the increasing likelihood that US policy-makers may have to embark upon additional monetary easing to counter stalling growth,” said Shankar, interpreting the iFlow FX data.
Like us on Facebook
Recent comments from Federal Open Market Committee (FOMC) members also confirm that “additional monetary easing,” or QE3, remains an open option for the Federal Reserve.
William Dudley, President of the New York Federal Reserve, recently said it is “possible that [the Fed] could do another round of quantitative easing [QE3]… to provide greater stimulus,” according to Reuters.
Fed Vice Chair Janet Yellen said in a prepared speech that “securities purchases across a wide spectrum of maturities might become appropriate” if economic conditions call for them.
Fed Governor Daniel Tarullo said in a prepared speech that “large-scale purchase of additional mortgage-backed securities” should be moved to the “top of the list of options” for “additional accommodative measures.”
Whether or not QE3 will materialize largely depends on the strength of the U.S. economy. Fed officials and many investors form their views on this matter based largely on major U.S. economic reports.
The most important reports on the horizon are the Nov. 3 ISM Non-Manufacturing PMI and the Nov. 4 BLS non-farm payrolls report for October.
Weak Eurozone Data, Greece Downgrade Hit Stocks: Daily Markets WrapIt didn't take long for the initial relief following Tuesday's long-awaited Greek bailout deal to die down.
Saffron Extract Benefits: 6 Reasons Why Dr. Oz’s Natural Weight Loss Aid Can Work for YouDr. Oz knows a thing or two about staying fit. On Monday, television's most popular doctor promoted a natural "miracle" appetite suppressant called saffron extract.
Iranian Pastor Youcef Nadarkhani Gets Final Execution OrderIran has issued what could be the final execution order for Youcef Nadarkhani, the Christian pastor who was found guilty of renouncing Islam.
iPad 3 Releasing on March 7? Doomsday for Kindle Fire and PlayBookApple's next generation tablet iPad 3, the successor to Apple's iPad 2, is expected to be launched on March 7.
We value your privacy. Your email address will not be shared.
Stocks to Buy for 2012: Picks from Hedge Fund Managers
![Ash Wednesday: Faces of the Faithful [PHOTOS]](http://img.ibtimes.com/www/thumb/mainpage/237365-15095-ash-wednesday-faces-of-the-faithful-photos.jpg)
