No news is bad news for the USD

[thenews]

The US dollar is sold off across the board. There is no particular reason, but perhaps the lack of new tapering news weighs. After we got positive US figures and a known FOMC dove showing some hawkishness yesterday, today’s lack of news is hurting the greenback.

Not all currencies are reacting in the same manner. Update:

• GBP/USD: The waiting for forward guidance ended: the BOE now ties an unemployment rate of 7% to tightening of the rates and the reduction of QE. While this certainly is news, the uncertainty is gone. After cable fell to nearly 1.52, it topped 1.55 in a knockout move.
• EUR/USD is climbing once again above 1.33. It already made false breaks, but perhaps the better than expected German industrial output reported earlier (2.4%) can help the pair sustain the move this time.
• USD/JPY: The fall of Japanese stocks pushed the pair lower, and the move now extends to 96.65. The BOJ meets later on. Will they act, at least verbally, to weaken the yen? In the meantime, USD/JPY is descending in the channel.
• AUD/USD is climbing above 0.90. The rate cut indeed came, but perhaps it was the last in the near future. There have been calls for a bottom in AUD/USD. At least for now, this is materializing.
• USD/CAD is off the highs. After it topped 1.04, the pair is weakening, but isn’t falling below this level. The Canadian dollar seems to weaker than its peers, also due to a big drop in build permits.

Yesterday, Charles Evans, a known dove on the FOMC, mentioned a realistic option of tapering in September. This helped the dollar. Evans’ comments came after trade balance hit the lowest deficit since 2009 and the Fed favorite JOLTS figure showed the highest level of job opening since that year.

A lower deficit raises GDP and better jobs figure raises the chances of tapering. But today is another day.

The next big release in the US is the weekly jobless claims number, which fell to the lowest since January 2008 last week: 326K.

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