The US dollar retreated today as US policy makers were trying to talk down expectations of an interest rate hike that were driving the greenback up last week. The US currency is attempting to regain its footing at the current time, erasing the big part of its losses versus the Great Britain pound and the Japanese yen.
St Louis Fed President James Bullard said that Fed Chairperson Janet Yellen’s comment about a “six-month gap” on an interest rate hike was no very different from the previous central bank’s stance. He added that the outlook “wasn’t very different from what we had heard from financial markets, so I think she’s just repeating that at that time period”. Minneapolis Fed President Narayana Kocherlokota echoed such view, saying that the Fed’s guidance “does not indicate any change in the Committee’s policy intentions as set forth in its recent statements”. Dallas Fed President Richard Fisher confirmed that “it will be quite some time” before the first increase of borrowing costs.
Several other US policy makers will also speak this week and traders wait for their comments to understand the plans of the US central bank and set their positions accordingly. Without any significant events over the week, their words should be the main driver for the dollar. All in all, this week is expected to be rather quiet for the US currency and the Forex market as a whole.
EUR/USD rallied from 1.3796 to 1.3834 as of 22:26 GMT today. GBP/USD went up from 1.6462 to 1.6535 but retreated to 1.6493 later. USD/JPY traded near 102.24 following the rally from 102.13 to 102.63.
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