US Greenback Could Rise as FOMC Minutes Flag Fed Coverage Standstill
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US DOLLAR FORECAST: BULLISH
- US Dollar selloff stalls because the Fed coverage outlook strikes away from dovish extremes
- Officers signaling that financial coverage could have reached its Covid-fighting limits
- FOMC minutes could reiterate hands-off stance, souring market-wide threat urge for food
The US Greenback has been stabilizing since early- to mid-August after a precipitous decline the mid-March Covid outbreak peak. The selloff mirrored ebbing safety-minded shopping for because the Fed’s expansive stimulus effort – most notably, an open-ended QE program – cooled credit market stress and revived risk appetite. The slide discovered a flooring because the US central financial institution signaled a pivot towards wait-and-see mode.
Tellingly, the Dollar discovered a flooring simply because the yield benefit loved by benchmark 10-year US Treasury bonds towards main worldwide alternate options started to cautiously increase. The slope of the US yield curve steepened in tandem, signaling that traders’ Fed…