With the Fed expected to remain gloomy on the US economic outlook and keep rates at near 0 for some time yet, the US Dollar declined to a two-week nadir.<\/p>\n
The Fed is expected to stick with its current low interest rate policy for the coming three years, which could hit demand for the US Dollar.<\/p>\n
A rate hike is not on the cards. If it did happen it would be USD positive<\/p>\n
Greg Anderson, global head of FX strategy at BMO Capital Markets in New York believed that signs of a rate hike in 2023 could be a big story.<\/p>\n
\u201cAny sign of a rate hike in 2023 could see equities and commodities sell off and the dollar rally,\u201d he added.<\/p>\n
In the afternoon session, USD\/JPY traded – 0.3% at 105.46, recovering slightly after sliding to a two-week low 105.30.<\/p>\n
Analysts predict a break below 105.20 could open the door to a deeper selloff<\/p>\n
Another analyst said that the Fed will be careful given that the Presidential elections are so close, turmoil in the financial markets is not what they are looking for.<\/p>\n
US Dollar Index (DXY) trades 93.062 in a mild recovery as the Euro reversed gains.<\/p>\n
The euro trades -0.1% at $1.1851..<\/p>\n
The Euro advanced after ZEW economic sentiment data revealed that investor sentiment in the Eurozone\u2019s largest economy rose in September, despite headwinds from Brexit and rising coronavirus infections.<\/p>\n
Upbeat Chinese data overnight also under pinned the Euro whilst lifting commodity- currencies such the Australian Dollar and New Dollar.<\/p>\n
China\u2019s industrial output increased and retail sales, surprised to the upside, rising for the first time this year.<\/p>\n
The Chinese yuan rallied to its highest since May 2019 versus the greenback and traded -0.4% at 6.779 yuan in the offshore market.<\/p>\n
U.S. equities also surged, as the mood in the market improved.<\/p>\n
\u201cabundant liquidity from the Fed and rising optimism for a vaccine and the global recovery is driving both equities and the US Dollar,\u201d said BMO\u2019s Anderson.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
With the Fed expected to remain gloomy on the US economic outlook and keep rates at near 0 for some time yet, the US Dollar declined to a two-week nadir. The Fed is expected to stick with its current low interest rate policy for the coming three years, which could hit demand for the US […]<\/p>\n","protected":false},"author":163946597,"featured_media":5458,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2675,1381],"tags":[2673,1398,3168],"class_list":{"0":"post-104810","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-jpy","8":"category-usd","9":"tag-jpy","10":"tag-usd","11":"tag-usd-jpy"},"acf":[],"yoast_head":"\n