9 Dec 2013
Flash: USD heavy. Tapering is not tightening - BBH
FXstreet.com (Córdoba) - Contrary to what many, the expected divergence of monetary policy between the Federal Reserve tapering on one hand, and the European Central Bank (and Bank of Japan) which likely to have to provide more monetary support next year on the other hand, has not spurred a US dollar rally against European currencies, noted the BBH Global Currency Strategy Team. "There is little reason to expect this to change, from a technical point of view".
Key Quotes
"The dollar's losses have not been broad based. Sterling and euro (and the Swiss franc and Danish krone) are where the greenback's losses have been concentrated".
"In part, the market appears to be taking the Fed's guidance seriously. Tapering is not tightening".
"The dollar's weakness against the European currencies does not appear exhausted. The only cautionary note from technical indicators is that the euro and Swiss franc are at the top of their Bollinger Bands, which are set +/- 2 standard deviations from the 20-day moving average".
"The next technical target for the euro is $1.3800-30".
Key Quotes
"The dollar's losses have not been broad based. Sterling and euro (and the Swiss franc and Danish krone) are where the greenback's losses have been concentrated".
"In part, the market appears to be taking the Fed's guidance seriously. Tapering is not tightening".
"The dollar's weakness against the European currencies does not appear exhausted. The only cautionary note from technical indicators is that the euro and Swiss franc are at the top of their Bollinger Bands, which are set +/- 2 standard deviations from the 20-day moving average".
"The next technical target for the euro is $1.3800-30".