News that the Federal Reserve will likely delay its plans to taper its asset purchase program is sending the US dollar lower today. The recent budget battle in the United States has prompted concern amongst policymakers about the economic recovery.
Worries about the impact of the recent budget battle in the United States are leading many policymakers to believe that the US economy recovery still needs a little bit of help from the asset purchase program. Demand for Treasuries is hight, forcing yields lower.
Expectations for a delayed taper and the low yields are sending the greenback lower today. The dollar index is lower, and the greenback is down against most of its major counterparts.
Even though the dollar is lower right now, there is the concern that the greenback is oversold. Some believe that the greenback probably shouldn’t be losing so much ground. Things could change quickly with the news — and if the Federal Reserve does decide to taper after all.
At 16:39 the dollar index is down to 79.5910 from the open at 79.7190. GMT EUR/USD is higher, rising to 1.3692 from the open at 1.3676. GBP/USD up to 1.6182, gaining from the open at 1.6165. USD/JPY has moved lower, dropping to 97.7800 from the open at 97.9300.
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