March Dollar Madness On Dudley?
By MarketPulse FX:
by Dean Popplewell
Last week, the dollar succumbed to profit taking from Fed's Evans' dovish overtones on Friday. This week's direction will be set early by New York Fed Dudley’s speech later this morning. The market will be focusing on whether he will be able to talk down the recent rise in treasury yields (nine consecutive days-10’s at 2.29% +30bps) and whether he “reignites expectations that another round of quantitative easing could be unleashed in the US.” Recent strong data in the region has allowed the market to pare back some of their strong views on QE3, believing that the US is naturally gaining traction. However, any further dovish overtones will only reinforce dollar negativity. The recent surge in US Treasury yields has made the greenback less appealing as a funding currency versus the yen. The yen’s status as the currency of choice in funding “carry” trades was solidified lastComplete Story »