Market Snapshot – Focus on the Dollar and the Euro

Dollar Continues to be Under Focus

The star over the last couple of days has been the dollar ever since the FOMC announcement and it is natural that the dollar hogs the limelight following the hawkishness from the Fed. Though the Fed did not hike rates, they kept the door well and truly open for the next rate hike in December and this was enough for the dollar bulls to begin a large bought of dollar buying which helped the dollar to recover all across the board over the last 24 hours or so. The announcement in itself was not hawkish but it was the dot plot which contained the bullishness and the dollar bulls would hope that the incoming data over the next couple of months would continue to be strong so that it makes the decision of the Fed easier.

Euro and Draghi Under the Limelight

The BOJ left the rates unchanged and this was again, something that was expected from the BOJ and this helped to keep the pressure on the yen. The focus for the later half of the day is on Draghi and the Euro as Draghi is scheduled to make a speech and it remains to be seen whether he will touch upon monetary policy and also give hints on tapering of the QE in his speech. It is doubtful whether he will touch upon the same and even if he did, it might lead to a small bounce in the strength of the euro before the dollar strength returns back again in the short term.