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27 Sep 2013
Flash: The long wait for USD strength - Rabobank
FXstreet.com (London) - The Financial Markets Research team at Rabobank said following its post FOMC plunge last week, the USD index then crept a touch higher.
Key Quotes:
“Although the Fed decided not to reduce the size of its monthly asset purchases this month, there is a suspicion led by the comments of Federal Reserve hawks such as Esther George, that tapering may not be delayed for very long”.
“Measured from the day after the September FOMC, emerging market currencies have underperformed the USD across the board signalling that the burst of risk appetite that immediately followed the Fed’s September 18 decision has had little follow through”.
“In the same period the USD also won back some ground against most G10 currencies”.
“That said, while we maintain a positive medium-term outlook for the USD, signs of more definitive upside momentum for the greenback will have to wait until Washington has overcome its budget hurdles and until US economic data suggests that the US economy is sufficiently self-sustaining for QE to be reduced”.
Key Quotes:
“Although the Fed decided not to reduce the size of its monthly asset purchases this month, there is a suspicion led by the comments of Federal Reserve hawks such as Esther George, that tapering may not be delayed for very long”.
“Measured from the day after the September FOMC, emerging market currencies have underperformed the USD across the board signalling that the burst of risk appetite that immediately followed the Fed’s September 18 decision has had little follow through”.
“In the same period the USD also won back some ground against most G10 currencies”.
“That said, while we maintain a positive medium-term outlook for the USD, signs of more definitive upside momentum for the greenback will have to wait until Washington has overcome its budget hurdles and until US economic data suggests that the US economy is sufficiently self-sustaining for QE to be reduced”.