John Kicklighter

The US dollar fell against all of its most liquid counterparts this past week. In fact, the a href=”http://www.dailyfx.com/forex_market_news/us-dollar-index/” class=”gsstx”Dow Jones FXCM Dollar Index/a tumbled for 9 out of the 10 past trading days and subsequently closed out the trading week at its lowest level since November 14th.
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Did the Fed meet the marketrsquo;s expectations for greater accommodation? A forecast of virtually-zero interest rates through the end of 2014 does not have the same level of amperage that a wholesale asset purchasing program (long ago given the moniker lsquo;QE3rsquo;) would. The masses seem to be slowly coming to terms with the reality that perhaps the Fed short of expectations in its lsquo;hand-sittingrsquo; approach.
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There has been a notable downshift in the moderate - but persistent - risk appetite and Euro recovery trends that have defined the broader tendencies of the market over the past weeks. As a href=”http://www.dailyfx.com/forex_market_news/us-dollar-index/” class=”gsstx”the dollar/a happens to play the role of safe-haven-of-last resort, its position on any clear sentiment bearings should be relatively clear.
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Unless we see the persistent (but restrained) bid for lsquo;riskyrsquo; assets and the nascent rise in the euro reverse, the dollar will extend is extend its decline. The greenback has two sources of serious strength ndash; fear of a breakdown in global financial stability and a wholesale transfer of capital away from the Euro-region, and neither is working in favor of the safe haven.
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Though the dollar managed to regain a little lost ground against the euro Friday, the currency was still under pressure into the close.
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