US Dollar Index Steady Ahead of Minutes, Aussie Loses on Dovish RBA Minutes | IFCM India
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US Dollar Index Steady Ahead of Minutes, Aussie Loses on Dovish RBA Minutes - 20.8.2013

Again during overnight we saw the US dollar index changing slightly by falling from 81.30 to 81.15. Recently there have been talks on who is going to be the Fed chairman with Larry Summers and current Vice Chairman Janet Yellen the most likely candidates. Chances are rising for the former adviser of Obama who previously expressed his concerns on inflation risks and sounded hawkish on the 6.5% unemployment threshold. As a result of that US 10 Year bond yields have been advancing to more than 2-year high at 2.88.


The Australian dollar against the greenback kept falling and was weighed additionally by RBA minutes of the August 6 meeting. RBA has also decided on that day to cut key rate to 2.50% from 2.75% and at its considerations for Monetary Policy said that “growth is below trend pace” and “inflation remained low”. Also added that “inflation outlook might afford some scope to ease policy further” sounding more dovish and making the Aussie heavier. The AUDUSD is falling further as of writing breaching support at 0.9058 and heading to next support at 0.90, followed by 161.8% extension of 0.9058 to 0.9219, at 0.8959.


US Dollar Index Steady Ahead of Minutes, Aussie Loses on Dovish RBA Minutes


Elsewhere, the USDJPY retreated lower weighed by falling Equity indices around the globe, the pair dipped to support at 97.16. The US S&P 500 dropped by 0.59%, the Dow Jones also dropped by 0.47% and then were followed by Asian stocks with NIKKEI 225 losing 2.63% and Hang Seng down by 1.87%. Thus, traders sought for a safer currency like the Japanese Yen. Uncertainty on US asset tapering is increasing volatility and for that reason FOMC minutes of the 31st July meeting are highly anticipated.
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