29 Aug 2013
Flash: Fed-tapering debate creeps back into investors’ psyche – BMO Capital Markets
FXstreet.com (New York) - The USD firmed up nicely earlier today, though month-end flows aside, it’s quite likely that the move higher in the currency also reflected a return to macro and data-dependency mode as we await the result of the UN chemical weapon inspection teams in Syria, notes Greg Anderson at BMO Capital Markets.
Key quotes
“Prudent as ever, Britain’s incremental approach towards the Syrian situation has shifted the focus of market participants back on the economic data and the US jobless claims and revised Q2 GDP – moreover, the tapering debate is back.”
In addition, “Developing economies sit faced with a further, persistent drain on their FX reserves, and those reserves are not growing nearly as fast as they once did. But the risk here is that amidst the hysteria and the hype, all of us take our focus off the underlying, structural issue: the failure to control volatile capital flows on a global basis.”
Key quotes
“Prudent as ever, Britain’s incremental approach towards the Syrian situation has shifted the focus of market participants back on the economic data and the US jobless claims and revised Q2 GDP – moreover, the tapering debate is back.”
In addition, “Developing economies sit faced with a further, persistent drain on their FX reserves, and those reserves are not growing nearly as fast as they once did. But the risk here is that amidst the hysteria and the hype, all of us take our focus off the underlying, structural issue: the failure to control volatile capital flows on a global basis.”