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.

Sep 19, 2013

QE shocker and what it means for the Aussie/RBA

The Federal Reserve announced it will maintain its $85 billion/month QE program, with Ben Bernanke striking a dovish tone thorough his press conferences, while expressing renewed concerns in the economy, which he anticipates may face pressure after the rise in bond yields. The market was caught off guard as a $10b taper had been priced in.

Gold surges above $1350 as no taper delivered

Gold reacted to the upside few minutes before FOMC announcement in a suspected leaked move ahead the news were out, as Tyler Durden at Zerohedge reports: “Around 4300 contracts changed hands in the Dec Futures - massively more than average volume - before the statement came out and drove prices further up.”