U.S Dollar Ignores Post-FOMC Dovish Stance

Looking at its most recent price actions, the battle between the bulls and bears seem to gather steam, as post-FOMC USD sell-off stalled near the 91.88 at Monday’s trading session, with DXY bulls holding reign on increased appetite for the safe-haven currency.

A subsequent move back above the 92 resistance area favors DXY Bulls and supports prospects for a further near-term appreciating move, taking into consideration the diminishing attraction towards riskier assets, on fears that COVID-19 is resurging.

On the monetary angle, global investors face a lot of openings as the Fed Chief makes his appearance twice this week which will be sure to keep currency traders on their toes.

Despite recent dovish statements of the Federal Open Market Committee, the benchmark 10-year Treasury yields on Thursday, spiked to a 14-month high, before moderating around the 1.679% yardstick.

Traders are also wary of reports coming from Bank of America hinting that Treasury 10 year yields could tick up to 2.15% by year-end, in a target it said was above consensus meaning riskier assets could face more downturn in the coming months.

After the concluded U.S Central Bank’s meeting, market pundits opined the 10-year yields till have a fair way to go on the bias that America’s economy will likely print a super-strong growth this year and as such drive yields and the greenback’s value much higher.

Emerging markets currencies particularly the Turkish Lira went into meltdown mode after President Recep Tayyip Erdogan sacked his central bank chief after raising interest rates, thereby triggering investors to hold the safe-haven currency momentarily, as the greenback gained more than 9% against the Turkish Lira.

That being said, dollar bulls might surpass monthly tops, around mid-92.00s and aim to reclaim the 93.00 marks in the mid-term.