More Quantitative Easing from the Fed?
Concerns that the Fed may engage in more quantitative easing is sending the U.S. dollar lower in currency trading on the FX market. Worries are that the Fed may move away from balance sheet reduction in favor of more economic stimulus.
So far, the economy has recovered but slowly, with the latest news out about stagnant incomes and consumer spending once again raising questions about job market recovery — and about economic recovery in the U.S.
As a result, the U.S. dollar is heading lower on the fundamentals. Even though risk appetite is fading from the FX market today, the dollar is not getting a boost, since traders are considering the fundamentals, and the possibility that monetary easing continues to weaken the U.S. dollar for the long term.
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