It's interesting that DOW futures are down 1.3% (-138) to 10,752, and the US Dollar is up .07% (.555) to 80.09 tonight after the Senate passed the revised bailout bill. It's tough to say what will happen with the USD when the House vote catalyst hits the wire. What is currently driving the bid in the USD? Is slowing global growth overpowering the USD dilution/economic growth fears? Plus there's a chance that the European Central Bank might lower rates, which could also bring support to the USD.
"European Central Bank President Jean-Claude Trichet has stated his strong support for the US effort saying that the must “go (in favor), for the sake of the U.S. and for the sake of global finance.” Such statements have led some to believe that today’s ECB meeting will result a rate cut. Furthermore, the Euro hit a low of 1.393 ahead of the key meeting."
We'll see how the USD reacts to the catalyst and if it can pierce through resistance at 80 - 81... If traders react negatively to the vote, the USD could correct to 78 - 76. Here are US Dollar bets from a Bloomberg Article I read tonight..
Dollar Bullish
``Market consensus is that the bill will eventually pass in some kind of form,'' said Akifumi Uchida, deputy general manager of the marketing unit in Tokyo at Sumitomo Trust & Banking Co., Japan's fifth-largest bank. ``The package is likely to reduce worries over the U.S. and bolster the dollar.''
``The Senate's approval may alleviate concerns over the U.S. a bit,'' said Tsutomu Soma, a bond and currency trader at Okasan Securities Co. in Tokyo. ``It's supportive of the dollar.''
``The ability to secure funds in the money market hasn't improved in the slightest,'' said Akio Shimizu, chief manager of foreign-exchange trading in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan's largest publicly listed lender. ``This should support the dollar as banks that need the currency will simply buy it outright in the foreign-exchange market.''
Dollar Bearish
``U.S. stock futures are down a lot after the vote, and that's one reason to sell the dollar,'' said Motonari Ogawa, director of currency trading in Tokyo at Barclays Capital Inc., a unit of the U.K.'s third- biggest bank. ``There's still some doubt whether this bill will pass the House.''
