Dollar collapse continues today

Dollar collapsed yesterday following Fed's announcement to ramp up the money printing machine to purchase up to $300b of long term treasury securities and expand purchase of mortgage backed securities by $750b and agency debts by $100b. The selling in dollar subsided a bit in Asian session but after all, the greenback is still under tremendous pressure against major currencies. On the other hand, yen crosses are generally lower today on profit taking and repatriation flows as well as talk that ECB may soon follow Fed, BoE and BoJ on the quantitative easing path. Also, But after all, further downside is in favor in the greenback in near term.

In the BoJ report released today, the bank said that economy has deteriorated significantly and is likely to deteriorate further as export suffers due to "deterioration in overseas economic conditions and appreciation of yen". Financial conditions will remain tight and firms with low credit ratings are still having difficulties raising capital.