6 Nov 2013
Flash: USD reverses initial decline following debt ceiling agreement - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the US dollar has reversed its initial decline which followed the short-term agreement to raise the debt ceiling until the 7th February 2014 and re-open the government at least until the 15th January 2014.
Key Quotes
“The short-term agreement had initially prompted investors to delay Fed QE tapering expectations further into 2014 with the 18th-19th March FOMC meeting viewed as the most likely meeting at which the Fed may begin to taper QE.”
“Stronger than expected US economic data releases so far for October signalling that the negative economic impact from the government shutdown and debt ceiling uncertainty may have been only very modest is serving to make investors more nervous that the Fed may begin to taper QE earlier at the 17-18th December or 28th-29th January meetings.”
“The ISM non-manufacturing survey for October beat consensus expectations similar to the manufacturing survey rising modestly by 1.0 point to 55.4.”
“The employment sub-component also rebounded strongly by 3.5 point to 56.2. Heightened Fed policy uncertainty has dampened investors’ appetite to rebuild carry positions.”
Key Quotes
“The short-term agreement had initially prompted investors to delay Fed QE tapering expectations further into 2014 with the 18th-19th March FOMC meeting viewed as the most likely meeting at which the Fed may begin to taper QE.”
“Stronger than expected US economic data releases so far for October signalling that the negative economic impact from the government shutdown and debt ceiling uncertainty may have been only very modest is serving to make investors more nervous that the Fed may begin to taper QE earlier at the 17-18th December or 28th-29th January meetings.”
“The ISM non-manufacturing survey for October beat consensus expectations similar to the manufacturing survey rising modestly by 1.0 point to 55.4.”
“The employment sub-component also rebounded strongly by 3.5 point to 56.2. Heightened Fed policy uncertainty has dampened investors’ appetite to rebuild carry positions.”