US Dollar Strengthens On Dallas Fed Fisher's Comments
Brussels (Nov 5) The US dollar spiked up on Asian deals after the Federal Reserve Bank of Dallas President Richard Fisher said that the central bank's accomodative monetary policy has been countered by Federal government's inability to resolve the budget stalemate, delaying the US economic recovery.
"The economy of the United States is hog-tied by a government that is sadly ineffective and, in fact, counterproductive. The inability of our government to get its act together has countered the pro-cyclical role of the Federal Reserve," Fisher told before the Australian Business Economists in Sydney today.
"It is no small wonder that the most expansive monetary policy the FOMC has ever engineered has been hampered from accomplishing what it set out to do. In short, while the Fed has been moving at the speed of a boomer in full run, the federal government of the United States has at best exhibited the adaptive alacrity of a koala," Fisher added.
Regarding the Fed's future action, Fisher told that keeping the central bank's easy policy too long won't produce the desired outcome and expects it to be normal as soon as possible.
The greenback appreciated to 0.9151 against the franc for the first time since October 16. The next probable upside target for the greenback is seen around the 0.925 area.
The greenback hit 1.3441 against the euro, a level unseen since September 18. If the greenback rises further, it may face resistance at the 1.335 level.
The greenback climbed to near a 3-week high of 1.5903 against the pound, up from Friday's closing value of 1.5919. On the upside, the greenback is likely to target resistance around the 1.58 zone.
The greenback reached as high as 98.83 against the Japanese currency, a few pip short to touch last week's highest peak since October 17. Further gains could see the greenback testing resistance around the 99.5 level.
Looking ahead, PMIs from major European economies and Eurozone sentix investor confidence index for November are due in the European session.