Market expect Yellen to announce the stimulus reduction
Speculations based on the latest weak Non-Farm Payroll statistics from US which was weaker than expected (113000 against 190000) still on-going. Due to this fact US dollar is yet to respond to one of the figures of technical analysis and US dollar index is traded under the level of 81.00, but higher than 80.50. This dynamics can be explained by the fact that the new head of Federal Reserve Janet Yellen can announce the suspension of QE3 buyout.
Nevertheless, traders do not expect any announcements from Yellen about it today. We believe that weak statistics is due to surprisingly cold weather in North America. Even though there are such poor results in the labor market it is possible to make a prediction that Fed Reserve will change the strategy towards stimulus reduction. In case Yellen decided to suspend QE3 it will have a massive impact on US dollar.
By now we believe that the decrease of US dollar was due to technical factors as it was highly overbought.
Semen Kamensky