Dollar remains generally pressured after FOMC minutes revealed that members unanimously supported keeping asset purchase pace unchanged. The greenback is only partially supported, more notably against Yen by surging treasury yield. Overall, Dollar is still one of the weakest for the week together with Yen and Sterling.
“All participants judged that it would be appropriate to continue those purchases at least at the current pace, and nearly all favored maintaining the current composition of purchases,” the minutes noted. “A couple of participants indicated that they were open to weighting purchases of Treasury securities toward longer maturities.”
Further, “some participants noted that the committee could consider future adjustments to its asset purchases — such as increasing the pace of securities purchases or weighting purchases of Treasury securities toward those that had longer remaining maturities — if such adjustments were deemed appropriate,” the minutes said.
Dollar index is extending the medium term down trend from 102.99 for now and further decline is expected as long as 91.01 resistance holds. DXY is on track to a key support zone, between 88.25 and 61.8% projection of 102.99 to 91.74 from 94.74 at 87.88. We’d expect further loss of momentum approaching this zone. Tentatively, some strong support should be seen there, at least on first attempt, to bring rebound.