Dollar Index: Fed Mandates A Lower Dollar
Try as hard as they might, and with all guns blazing at the problem, the Fed today admitted that they are having a tough time in generating growth, and in doing so having a really hard time in reducing the value of the Usd. The index remains in bullish near-term mode, but after a day of equity buying may not be able to hold back the advances of the major pairs through to the end of the trading week on Thursday. Most regions are closed for the Friday and Monday bank holiday, and as such the markets may see a very lively move in overnight Asian trade. The path of least resistance is lower it would seem, and that may be sooner rather than later.
Overall: Still No Dollar Weakness
“The forex markets were benign on Wednesday, with most of the majors moving in a tight range against the greenback” said TheLFB-Forex.com Trade Team members.” The biggest hit was in reaction to the S&P slides as the U.S. Inventory numbers were released, and then again once the minutes of the FOMC meeting were released. But, fair play to equity bulls, they rallied things into the close and sent a warning sign out to those looking to the safety of the dollar to be aware; the Fed wants it devalued, and that call will not go unanswered.”
Treasuries rose as traders made the move from riskier assets to bonds, and followed the path of least resistance on the day, and moved note values higher and yields lower in preparation for the absorption of massive flows of new debt that came to market today. The 10 year Treasury yield held at 2.89%, the two year remained unmoved at 0.91%.
Crude for April delivery was recently trading up $0.95 (1.9%) at $50.10 per barrel.
Gold for April delivery was recently trading down $1.30 (+0.1%) at $882 per ounce.