US equities tumbled overnight on further speculation on fed's tapering and took the greenback lower. The Dowe plunged -225.47 pts to close at 15112.19 and more importantly, it took out the 55 days EMA decisively. Deeper fall is in favor to 15000 psychological level in near term. Meanwhile, dollar index faced strong resistance from 82 level and reversed initial gains. The index is currently trading at around 81.2/3. EUR/USD is back above 1.33 level at the moment while GBP/USD extended recent rally to above 1.56. However, treasury yield jumped to two year high with 10 year yield closing at 2.755% and 30 year yield closed at 3.792%.
According to a Bloomberg survey, 65 % of economists expected Fed to taper the asset purchase program in September. Nonetheless, the majority expected it would be a small reduction. FOMC could probably lower the $85b per month open ended asset purchase by $10b. That's half the amount of $20b reduction speculated back a month ago. But again, note that we're still a month away from FOMC's September 18 meeting. And there will be an important NFP release on September 6. The greenback would likely remain volatile.
Technically, EUR/USD is still holding above 1.3182 minor support for the moment and there is no confirmation of reversal yet. 1.34 is an important level in the pair which it failed last week. We're not bearish in the greenback yet despite but would be very cautious. Should EUR/USD take out 1.34 decisively, dollar might be sold off broadly.
As for today, Eurozone CPI, trade balance and current account balance will be released in European session. Canada will release International securities transactions and manufacturing shipments. US will release new residential construction, U of Michigan sentiment and non-farm productivity revision.
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Dollar Tumbles With Dow
Published 08/16/2013, 05:22 AM
Updated 03/09/2019, 08:30 AM
Dollar Tumbles With Dow
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