19 Nov 2013
US equities run out of steam on open while the dollar remains under pressure
FXstreet.com (London) - Equity markets are struggling today on a hangover from three days of rallying through new highs. The Dow and the S&P yesterday broke through key levels to hit record levels at 16,030.28 and 1,802.33 respectively. However they have opened down today as yesterdays hangover remains.
The US open mirrors Europe where equities have declined from highs after soaring to their highest valuations in five years. The Ftse has declines 0.37 percent and the Dax 0.1 percent as some investors move to pare their risk exposure.
Easy money keeps dollar under pressure
But while equities seem to be running out of steam after the boost given by Janet Yellen’s remarks before the US Senate last week, the dollar remains under pressure on the prospect of continuing loose Fed monetary policy.
Speaking before the Senate as part of her confirmation hearing before she replaces Ben Bernanke as chairman of the Federal Reserve, Yellen boosted bets that the central bank would be cautious in its approach to tapering its USD85bn-a-month asset purchase programme. Yellen, who will be taking over the Fed’s top job on 31 January 2014, said that while the economy had recovered by a degree, there remained an important role for the Fed to play in any further strengthening, particularly in the labour market.
The dollar was put under further pressure yesterday when New York Fed president William Dudley yesterday indicated that while the economy is performing better than anticipated, there would be no change to the asset purchase programme.
“While growth in 2013 has been disappointing, I believe a good case can be made that the pace of growth will pick up some in 2014 and then somewhat more in 2015,” said Dudley. “As growth picks up, I expect to see more substantial improvement in labor market conditions.”
Ben Bernanke will speak tonight when it is anticipated that he will reiterate the stance that economic recovery is not yet strong enough for the Fed to reduce its support.
EUR/USD is up 0.11 percent to USD1.3517.
The US open mirrors Europe where equities have declined from highs after soaring to their highest valuations in five years. The Ftse has declines 0.37 percent and the Dax 0.1 percent as some investors move to pare their risk exposure.
Easy money keeps dollar under pressure
But while equities seem to be running out of steam after the boost given by Janet Yellen’s remarks before the US Senate last week, the dollar remains under pressure on the prospect of continuing loose Fed monetary policy.
Speaking before the Senate as part of her confirmation hearing before she replaces Ben Bernanke as chairman of the Federal Reserve, Yellen boosted bets that the central bank would be cautious in its approach to tapering its USD85bn-a-month asset purchase programme. Yellen, who will be taking over the Fed’s top job on 31 January 2014, said that while the economy had recovered by a degree, there remained an important role for the Fed to play in any further strengthening, particularly in the labour market.
The dollar was put under further pressure yesterday when New York Fed president William Dudley yesterday indicated that while the economy is performing better than anticipated, there would be no change to the asset purchase programme.
“While growth in 2013 has been disappointing, I believe a good case can be made that the pace of growth will pick up some in 2014 and then somewhat more in 2015,” said Dudley. “As growth picks up, I expect to see more substantial improvement in labor market conditions.”
Ben Bernanke will speak tonight when it is anticipated that he will reiterate the stance that economic recovery is not yet strong enough for the Fed to reduce its support.
EUR/USD is up 0.11 percent to USD1.3517.