Fed hike uncertainties to weigh on greenback

The suspicion that the Fed might postpone the generally expected imminent rate hike has put considerable pressure on the greenback. Adjusted by the risk-off effect, there is now 3% USD weakness since the CNY shock. Of course, people will not confirm prejudices. 

So if Dudley, the head of NY Fed, were to repeat his wording used on 12th August (thus putting further pressure on the stock market of course) the prejudice would be refuted. And the USD weakness seen over the past weeks would be largely unjustified. However, prejudices exist because they are often true.

"After all statistics are nothing else than the formalized expression of prejudices. It can hardly come as a surprise that long the greenback today would not be considered good", says Commerzbank.