FXStreet (Bali) - The US Dollar keeps finding heavy buying interest, with the DXY breaking into new highs above the 82.00 handle, levels not seen since Aug 2013.

Amid this ongoing bull flight on the US Dollar, with the characterizations of a strong trending market (making the most of good news and shrugging off bad ones), taking short positions on the currency continues to be a dangerous propositions, with the market starting to show greater conviction on an earlier-than-expected tightening cycle in the US.

The FOMC minutes, published a few hours ago, saw a couple of paragraph that gave USD bulls an excuse to keep bidding the currency. See below the most hawkish lines traders noted, to be taken with a grain of salt given the conditionality added.

"Many participants noted that if convergence toward the Committee’s objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated."

"At the conclusion of the discussion, the Committee agreed to state that labor market conditions had improved, with the unemployment rate declining further, while also stating that a range of labor market indicators suggested that there remained significant underutilization of labor resources. Many members noted, however, that the characterization of labor market underutilization might have to change before long, particularly if progress in the labor market continued to be faster than anticipated."

While the US Dollar is likely to continue attracting strong demand, it is important to bear in mind that the market is possibly getting to bullish ahead of Friday's Yellen speech at Jackson Hole, time when she will be able to update markets on her view about monetary policy... and if history is any indication, so far the Fed Chairwoman has shown little, if any, signs that may suggest the bullish run of the US Dollar may be fueled further. At this stage of the US economc cycle, it wouldn't be a surprise to Yellen keeps finding creative ways to ease the excitement among the hawks.

Related Articles
  1. Forex Education

    Four Currencies Under the Spotlight in 2016

    With currencies having become the “tail that wags the dog,” in terms of their impact on the global economy, these four currencies will be under the spotlight in 2016.
  2. Forex Fundamentals

    These Currencies Are The Biggest Losers Of The Stock Downturn

    Here’s a list of the hardest-hit currencies amid the global stock market mayhem.
  3. Forex Strategies

    Will the Euro Continue to Rally? (EUO)

    The euro is rallying. Should investors chase this performance or is the real opportunity on the other side of the trade?
  4. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  5. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  6. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  7. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  8. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  9. Investing

    Financial News Comparison: Bloomberg Vs. Reuters (BAC, GOOG)

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  10. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
COMPANIES IN THIS ARTICLE
Trading Center