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18 Oct 2013
Dollar continues to slide as UST yield curve flattens on 2014 taper projections
FXstreet.com (London) - The dollar has continued to take a knock today with the US Treasury yield curve flattening on Fed expectations, with medium-dated Treasuries falling fastest.
The dollar has come under pressure with the government shutdown and estimated USD24bn drag on GDP pushing any tapering of the Fed’s aggressively loose monetary policy well into 2014. With the debt ceiling extended to 7 February without any resolution of the arguments that led to America’s first government shutdown in 17 years being resolved, it is now highly unlikely that the Fed will move to taper its USD85bn-a-month asset purchase programme until March 2014 at the earliest.
Now that government agencies are back to work following the end of the shutdown, all eyes will be on Tuesday’s delayed non-farm payroll numbers.
With the Fed perhaps the single biggest driver of dollar direction right now, the non-farm numbers will be key. Anything less than the 180,000 consensus will be bad news for the dollar, concreting expectations of continuing ultra-loose Fed monetary policy.
GBP/USD is trading at USD1.6187, down from its USD1.6224 as sterling strays into overbought territory.
EUR/USD is up 0.14 percent to 1.3691.
The dollar has come under pressure with the government shutdown and estimated USD24bn drag on GDP pushing any tapering of the Fed’s aggressively loose monetary policy well into 2014. With the debt ceiling extended to 7 February without any resolution of the arguments that led to America’s first government shutdown in 17 years being resolved, it is now highly unlikely that the Fed will move to taper its USD85bn-a-month asset purchase programme until March 2014 at the earliest.
Now that government agencies are back to work following the end of the shutdown, all eyes will be on Tuesday’s delayed non-farm payroll numbers.
With the Fed perhaps the single biggest driver of dollar direction right now, the non-farm numbers will be key. Anything less than the 180,000 consensus will be bad news for the dollar, concreting expectations of continuing ultra-loose Fed monetary policy.
GBP/USD is trading at USD1.6187, down from its USD1.6224 as sterling strays into overbought territory.
EUR/USD is up 0.14 percent to 1.3691.