A currency whose central bank has held five times, prices no cut this year and still carries an increase by December should not be sitting at the bottom of its three-month range.
The Dollar Index trades near 99.00, up 0.15% and roughly 2.8% beneath its late-June peak, beneath a 200-day Exponential Moving Average (EMA) near 99.50 and a 50-day parked on the 100.00 handle
The rate story stopped paying somewhere in the middle of this month. Where the Dollars are coming from now The break that matters is five sessions old and it did not come from the Federal Reserve. The index lost a 200-day EMA it had held through the summer across August 19 and 20, the sessions that carried the Treasury’s move to double the ceiling on its long-end bond buybacks, and it has not traded back above the line since.
That was read at the time as a bond story. Today put a size on the programme. The Treasury General Account (TGA), the government’s operating balance at the Federal Reserve, is considered available to fund the purchases, and it stands near 950 billion Dollars against the 550 to 600 billion Dollar working level of the previous administration.