Forex today: DXY under water on dovish Fed talk

Forex today has the dollar back on the backfoot again in dovish remarks from Fed's Kashkari and Bullard. 

There was a lack of data today and instead, markets were fixated to Fed speakers Kashkari and Bullard who both displayed some concerns around the economy, growth and inflation, albeit Kashkari on the more optimistic side while Bullard suggests the drop in inflation may be persistent. 

The US ten-years were down -0.24%, closing at 2.2566% and the DXY at 93.42 within a range of 93.302 - 93.541 and down 8.59% YTD. The rising euro is a contributing factor to the dollar's decline, being the world's second most traded currency. Indeed, Bullard was saying today that the expectation of tighter ECB policy is behind the US dollar's decline this year. However, the euro was treading water just below the 1.18 handle for the most part of today's US session and in a tight range between 1.1772 and 1.1814. Cable was trading along the coat-tails of the euro, drifting slightly higher but with a lack of fundamentals, also in the absence of Brexit negotiation updates. The yen was trading in a narrow range, slightly soft with a bullish theme to Wall Street. Commodities (copper making a come back on Chinese stocking up rumours) were elevated as well as VIX short positions that hit a new record; the Dow was making its ninth record today at 22,140.00. AUD and Kiwi were both down slightly, 0.14% and 0.61% respectively. CAD was also slightly lower vs the dollar, -0.21%, while WTI was two-way business trading in a chop between $48.62 and $49.80.

Key events in Asia coming up

We have Aussie business and China trade data as the main events.

Key notes from US session

• Fed's Bullard: Expectation of tighter ECB policy is behind US dollar decline this year
• Fed's Bullard: Drop in US inflation may be persistent, it is concerning for Fed
• Fed's Bullard: Trend of 2% U.S. economic growth appears to be intact
• Fed's Kashkari: Reducing immigration to U.S. will slow economic growth