When doves cry at the US dollar

A report showing US job openings at the highest since 2001 barely boosted the dollar before it slumped to the lows of the day on signs the Fed is more focused on inflation. The yen was the best performer and CAD lagged as stocks were hit hard. China finally returns from holiday and the services PMI is due. We have just issued 4 new Premium trades with four new charts, bringing back EURUSD and introducing USDMXN. 

Influential Fed members are shifting their focus away from jobs and toward inflation in a sign that rates will stay low longer and that could mean a correction in the dollar.

Dudley andKocherlakota didn't sound like FOMC members who have been swayed by lower unemployment. Bernanke liked the JOLTS report on job openings but even a surge to a 13-year high of 4835K compared to 4700K expected hardly impressed the market.

That Kocherlakota was dovish isn't a surprise but that he remained so steadfast shows that the will of the doves to hold rates low is telling. Dudley is a more-influential Fed member and although he said it was a reasonable view to hike in mid-2015 he didn't sound like it was his view. Both men expressed fears about low, long-term inflation.

Those fears were underscored by softer IMF forecasts. Aside from slashing European and Japanese near-term forecasts, they cut longer-term potential growth rates for the US and UK.

The market has piled headlong into US dollars but the Fed is showing signs that it wants to hit the breaks. The market began to break as well, most notably the fall in USD/JPY below 108.00. That marks the first 'lower high' in the pair since July.

In the short-term, the market will be carefully watching China today as it reopens following a week of holidays that saw upheaval in Hong Kong. That could mean more stimulus and that would re-invigorate risk assets.

In terms of data, Japans current account balance is due at 2350 and China's HSBC services PMI is out at 0145 GMT. Neither are noted market movers.