The Dollar Always Seems To Suffer When No One Says Anything
The Jackson Hole summit everyone was waiting for is now over. There were lots of expectations for this summit but none of them proved correct. What will happen to the dollar now?
Let´s first go over what did happen at that summit. For starters, the market was expecting Janet Yellen (FED Chairwoman) to give a definite date for a rate hike, which would be December. But, she didn’t mention it. Although the odds are that we will see another rate hike this year in December, the market wants solid proof and it didn’t get any.
I don't really know what to do.
There were also expectations for a date to start reducing the balance sheet (selling back trillions of bonds the FED has bought since the beginning of the financial crisis), which would normally be in September, but we got none of that either.
The first reaction was to dump the US Dollar, which lost nearly a cent against most forex majors on Friday, but the decline stalled in the evening that day. Now, the market is trying to decide which side to take.
The market has gone against the USD for quite some time now, so it seems hesitant to push further. On the other hand, the FED is of no help to the Buck, so at the moment there is uncertainty, which means range trading. We will give a couple of trade ideas on how to play the USD range today, so check back in a while for the midday brief.
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