2 Sep 2013
Flash: EUR/USD to move into 1.30-1.31 next - BBH
FXstreet.com (Barcelona) - The market is likely to be disappointed by the FOMC in Sept, according to Marc Chandler, Head of Currency Strategy at BBH, saying there are many elements to take into account but each is a potential source of disappointment.
Key Quotes
"If the broad consensus is right and the Fed tapers in September, there can be a buy the rumor, sell the fact, behavior in the dollar and the opposite in US Treasuries."
"The market may be disappointed if the Fed reduces its monthly purchases by $10 bln rather than $20 bln. The market may be disappointed by the allocation of its tapering between Treasuries and MBS. Lastly, of course, the market would be disappointed if the Fed waited to taper. "
"However, such disappointment, if it is to come, is likely after additional dollar gains. During this phase, we initially anticipate the euro to move into the $1.3000-$1.3100 area."
Key Quotes
"If the broad consensus is right and the Fed tapers in September, there can be a buy the rumor, sell the fact, behavior in the dollar and the opposite in US Treasuries."
"The market may be disappointed if the Fed reduces its monthly purchases by $10 bln rather than $20 bln. The market may be disappointed by the allocation of its tapering between Treasuries and MBS. Lastly, of course, the market would be disappointed if the Fed waited to taper. "
"However, such disappointment, if it is to come, is likely after additional dollar gains. During this phase, we initially anticipate the euro to move into the $1.3000-$1.3100 area."