The u.s. dollar is the man most of us deficit America approached last week. Although Congress has been able to avoid the area of disability, and that this was only a few minutes, but there was no good height to the US dollar, compared with the stock of other standard heights last week, compared with bonds, which yield the full month decline by more than 30 basis points on Thursday.
And the weak dollar led by three factors: the first is Fitch Ratings has placed American level AAA credit rating under negative watch. The second factor is the sharp decline in bond yields, which lessened the yield advantage of the u.s. currency, the third factor is likely to postpone the decision to cut the Fed's purchases of assets until 2014. We believe that the third factor for the postponement of the decision to reduce the asset purchases from the Fed is the most important engine for the US dollar in the short term. Fischer said the federal Member is known for its tendency to move away from the soft monetary policy that it will not vote in favour of reducing purchases of assets in meeting federal open market Committee this month due to the blocking of the data and the difficulty in measuring economic performance.
The reduction of asset purchases in December at great risk following the lifting of the debt ceiling and budget America temporarily until August and September respectively. And the Fed may not choose to reduce purchases of assets during the next negotiating session if she ended up divisions as in the last debate. Will the Fed also realizes that although he has passed the law on raising the debt ceiling and Government funding, there are 144 of the Republicans who voted against the law, suggesting that an agreement in the future may be a difficult task.
At the end of last week, rushed into the market to eliminate the possibility of reducing its asset purchases from the fed in February, placing the burden on the u.s. currency. There were also expectations of interest rate deferred to the third quarter of 2015, where it is expected the market to take his time before the Fed tightening monetary policy after the recent political crisis. Was this burden on the 10-year bond yields, which fell 20 basis points to 2.55 percent last weekend.
Although basic economic factors may be weak for US dollar at the moment, but this week is a pivotal and significant week for the US currency and the future of federal reserve policy. We will begin this week for economic data, which has been postponed before, and most importantly the US employment report is the agricultural sector for the month of September. Although these statements seem rather old at this point, but still important. The market is expected to rise to 180,000 jobs from 152 000 in August, and if you see any stronger than this may result in high good for US dollar would be the sign that the US economy is in better shape despite the recent financial storm and shut down the US Government.
