Flash: USD with room to sell-off further - RBS

FXstreet.com (Barcelona) - RBS Treasury Strategists are significantly bullish on the US bond market, which according to Greg Gibbs, if they happen to be right and we see yields lower in coming weeks, "it may tend to be negative for the USD" Gibbs said.

Key Quotes

"A weak USD of course depends on the reasons for the fall in yields. If it is because the Fed now appears to be more dovish then it is USD negative. The Fed does indeed appear more dovish delaying the taper and odds swinging sharply this week from a Summers to Yellen Fed next year. "

"However a quote from one of our US Treasury team is relevant, recent events "shows a Fed that is increasingly wishy-washy about policy commitments. Therefore, at any point, tapering could be right back on the table again so the market needs a higher risk premium for this i.e. the mkt can rally from here but not anywhere close to previous heights of QE."