3 Factors Dragging Down the Dollar
NEW YORK (Sept 17) The confluence of unfriendly US data, Fed-related uncertainty, and the dissipation of safe-haven demand has pushed the US dollar broadly lower ahead of this week’s FOMC policy announcement.
The confluence of unfriendly US data, Fed-related uncertainty, and the dissipation of safe-haven demand has pushed the US dollar broadly lower ahead of this week’s FOMC policy announcement.
There are three reasons why the US dollar (USD) is trading lower against all major currencies this morning: economic data, speculation about the next Federal Reserve Chairman, and the latest developments in
According to the most recent US economic reports, the recovery in the manufacturing sector is losing momentum. In the
Over the past few months, weaker activity in NY has not coincided with slower activity across the nation, but this is another piece of data that will challenge the Fed’s upcoming monetary policy decision. Industrial production activity accelerated in the month of August, but the increase was less than the market had anticipated, and this was also the fifth consecutive month that industrial productivity missed expectations.
New Front-Runner for Next Fed Chairman
Over the weekend,
Summers, on the other hand, has not shared his views on monetary policy, but his unpredictability and potential for unscripted comments means he could have caused more volatility in the financial markets. While he was
Yellen was the more dollar-negative candidate, and now that she has become the clear front-runner, the currency has traded lower across the board.
Syria Resolution Is a Done Deal
The greenback also lost its safe-haven bid after the US and
The Dollar’s Biggest Event Risk This Week
Looking ahead, the focus this week is on Wednesday’s Federal Open Market Committee (FOMC) rate decision, although the latest string of weaker economic reports has made it even more difficult for the central bank to justify tapering this month. A slowdown in consumer spending, decline in confidence, and sluggish job growth all suggest that the recovery is losing momentum, but at this stage, sugggexting tapering may slow.