30 Oct 2013
Flash: Biggest risk is less dovish FOMC reviving USD bulls - BNZ
FXstreet.com (Barcelona) - Looking ahead, markets are now in a holding pattern ahead of the Fed decision on Wednesday, note FX Strategists at Bank of New Zealand.
Key Quotes
"No one is expecting any change in policy, but we might see a few words reshuffled to reflect the less upbeat US economic outlook. Tapering of Fed asset purchases still looks like a story for next year to us."
"The market now broadly shares this view, with the consensus seemingly dialled in for March. Given this, and still bearish USD positioning, the biggest risk currency markets face is probably that a less dovish than expected statement revives the USD."
"Such an outcome could see the DXY index extend its gains to 80.00 (currently 79.60), squeezing EUR/USD back below 1.3700."
Key Quotes
"No one is expecting any change in policy, but we might see a few words reshuffled to reflect the less upbeat US economic outlook. Tapering of Fed asset purchases still looks like a story for next year to us."
"The market now broadly shares this view, with the consensus seemingly dialled in for March. Given this, and still bearish USD positioning, the biggest risk currency markets face is probably that a less dovish than expected statement revives the USD."
"Such an outcome could see the DXY index extend its gains to 80.00 (currently 79.60), squeezing EUR/USD back below 1.3700."