19 Sep 2013
Why sentiment towards USD is so poor? There is more than just 'zero' taper...
FXstreet.com (Barcelona) - While all the headlines emphasize how the Federal Reserve shocked the markets by maintaining the same amount of monthly asset purchases at $85/month, with Bernanke outlining the economy is no longer enjoying the healthier state from back in May, there is another key take away which may help explain why the USD sentiment has turned so bearish.
According to bond fund manager Jeffrey Gundlach, cited by Dow Jones earlier on Wednesday, failure to start tapering today makes the Fed "tacitly increasing its purchases because the Treasury is issuing less debt... it's gone from buying about 100% of the budget deficit to buying 150% of the budget deficit" Gundlach said.
The bond manager attributes this % increase in bond buys as also one reason for the sour sentiment towards all things USD.
According to bond fund manager Jeffrey Gundlach, cited by Dow Jones earlier on Wednesday, failure to start tapering today makes the Fed "tacitly increasing its purchases because the Treasury is issuing less debt... it's gone from buying about 100% of the budget deficit to buying 150% of the budget deficit" Gundlach said.
The bond manager attributes this % increase in bond buys as also one reason for the sour sentiment towards all things USD.