The Dollar finds itself under pressure today ahead of Ben Bernanke's testimony, while the Euro is off lows as hedge fund buying triggered stop losses.
Today we saw the Euro rise versus the Dollar as a result of purchases from hedge funds which triggered a flurry of stop-loss buying. This pulled the Dollar down to a seven week low against a basket of currencies. What this in effect did was to exacerbate the Dollar's losses following poor U.S. retail sales figures.
The greenback was also down to a one month low against the Yen after Tokyo markets reopened following a holiday on Monday. The Yen was held back though on the threat of intervention by the Tokyo authorities and on weakness as against other currencies.
Today all traders are focusing their attention on the world's largest economy, the U.S, ahead of Federal Reserve Chairman Ben Bernanke's testimony before Congress today and Wednesday.
In the view of many analysts and myself, besides overtly signalling the possibility of more stimulus, there is not much Bernanke can say or do that he hasn't already. In fact, the sell off in the U.S. Dollar and U.S. equities show us that investors likely are positioning for slightly more dovish comments from Bernanke.
In June the Fed expanded efforts to keep long term interest rates low, when it announced that it would buy an additional $267 billion in long term bonds while selling short term securities in a measure that's been dubbed "Operation Twist", while at the same time the central bank held off from launching further quantitative easing.
Earlier today the Dollar stood at 78.90 Yen, and the Euro and Australian Dollar pushed higher versus the Yen, with the Euro gaining 0.3% to 97.04 Yen and the Aussie standing at 81.27 Yen.
The rise against the Japanese currency helped the Euro gain ground to the Dollar and earlier it stood at $1.2314.
It appears that the Euro has now become the funding currency of choice following both German and Dutch two year bond yields having turned negative recently.
Today we saw the Euro rise versus the Dollar as a result of purchases from hedge funds which triggered a flurry of stop-loss buying. This pulled the Dollar down to a seven week low against a basket of currencies. What this in effect did was to exacerbate the Dollar's losses following poor U.S. retail sales figures.
The greenback was also down to a one month low against the Yen after Tokyo markets reopened following a holiday on Monday. The Yen was held back though on the threat of intervention by the Tokyo authorities and on weakness as against other currencies.
Today all traders are focusing their attention on the world's largest economy, the U.S, ahead of Federal Reserve Chairman Ben Bernanke's testimony before Congress today and Wednesday.
In the view of many analysts and myself, besides overtly signalling the possibility of more stimulus, there is not much Bernanke can say or do that he hasn't already. In fact, the sell off in the U.S. Dollar and U.S. equities show us that investors likely are positioning for slightly more dovish comments from Bernanke.
In June the Fed expanded efforts to keep long term interest rates low, when it announced that it would buy an additional $267 billion in long term bonds while selling short term securities in a measure that's been dubbed "Operation Twist", while at the same time the central bank held off from launching further quantitative easing.
Earlier today the Dollar stood at 78.90 Yen, and the Euro and Australian Dollar pushed higher versus the Yen, with the Euro gaining 0.3% to 97.04 Yen and the Aussie standing at 81.27 Yen.
The rise against the Japanese currency helped the Euro gain ground to the Dollar and earlier it stood at $1.2314.
It appears that the Euro has now become the funding currency of choice following both German and Dutch two year bond yields having turned negative recently.
Posts
No comments:
Post a Comment