Forex: Why is the US Dollar Quiet on a Huge S&P 500 Break?

consumer demand also prompted the lower forecast, executives said. JPMorgan Chase & Co.s Global FX Volatility Index reached 11.96 percent on June 24, the most since June 2012, after rising at the fastest pace since the collapse of Lehman Brothers Holdings Inc. in 2008. Such dramatic swings are certainly not what corporates want to see, said Callum Henderson, the global head of currency research at Standard Chartered Plc in Singapore .

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Having put our faith in the ongoing support of the Federal Reserves stimulus programs, we have achieved record highs on 15-year lows in participation, a buildup based on record amounts of leverage while investors have significantly bolstered their risk profile in the pursuit of higher returns. Though not the sole factor in the capital markets rise, the US central bank is essential to maintaining the facade of strong and stable conditions. And, that is why there is so much concern surrounding the Taper and its time frame. Through the past three months, there have been a number of developments to undermine optimism and positioning founded on boundless support from stimulus including: data to support a steady economic backdrop; growing concerns surrounding the costs of an eventual exit and most importantly the Feds own warnings.

FOREX-Dollar rallies, united states reversing course, but doubts remain

“Yesterday’s data spooked investors into concern about a wholesale abandonment of U.S. assets,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. “If Treasury prices continue to fall, potential tapering may not be as broadly positive for the dollar as first thought. Ultimately rising bond yields will support the dollar but not against such a big change in the backdrop.” Ten-year Treasury yields traded near two-year peaks, while the gap between two-year Treasury yields and their Japanese counterpart rose to its highest in six weeks, Reuters data showed. U.S.

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FOREX-Dollar in box seat after retail sales fuel stimulus tapering talk

Part of the reason for yen bids volatility was positioning ahead of the weekend. Japanese investors were missing the action this week due to the Obon holiday, but should be returning late Sunday New York time. Some of the strength in the dollar/yen in New York trade on Friday was buying ahead of that influx of investors. Just $1.94 billion in yen changed hands on Reuters Dealing Friday.


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