23 Sep 2013
Flash: Will EM's keep the EUR/USD bid? - TD Securities
FXstreet.com (London) - Research teams at TD Securities note the relationship between the EM's and dollar, while EUR/USD would be supported in relation to EMFX in the short term.
Key Quotes:
"Fed’s decision to hold the pace of QE signals a cautious assessment of economic recovery; it delays the start of tapering and eases the pressure to tighten on EM policy makers. EM assets gained across the board, but the rally was short-lived. In a light week for global data, markets will focus on several Fed speakers this week".
"We continue to see scope for EMFX weakness over the 2-year forecasting horizon. However, a later QE tapering, uncertainty on US policy normalization, substantially stronger EUR/USD than forecast, and recovering EM economies support a scenario of stronger EMFX relative to our forecasts in the short term".
Key Quotes:
"Fed’s decision to hold the pace of QE signals a cautious assessment of economic recovery; it delays the start of tapering and eases the pressure to tighten on EM policy makers. EM assets gained across the board, but the rally was short-lived. In a light week for global data, markets will focus on several Fed speakers this week".
"We continue to see scope for EMFX weakness over the 2-year forecasting horizon. However, a later QE tapering, uncertainty on US policy normalization, substantially stronger EUR/USD than forecast, and recovering EM economies support a scenario of stronger EMFX relative to our forecasts in the short term".