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18 Oct 2013
Flash: Darkest period for USD since 2010/11 QE2 fall has arrived - RBS
FXstreet.com (Barcelona) - The next few months could be the weakest period for the USD since its fall in the 2010/11 QE2, notes Greg Gibbs, FX Strategist at RBS.
Key Quotes
"RBS US Economics team are forecasting a tapering announcement in March next year, allowing for the leadership change over at the Fed in January. But it seems the prospect of tapering has become much less clear and certainly looks unlikely this year, especially if government makes little clear progress towards a fiscal policy agreement."
"US yields have dropped sharply viewing US economic confidence dampened by the fiscal impasse and a Fed that decided not to taper QE. This may provide support for the housing market and help underpin the US economy, but puts downward pressure on the USD."
"The next month or three may be one of the weakest periods for the USD since late 2010/2011 QE2. The best hope for the USD is if Congress can make significant progress in closing their ideological gap on how to set longer term budget goals. The good news for them is that expectations are currently very low."
Key Quotes
"RBS US Economics team are forecasting a tapering announcement in March next year, allowing for the leadership change over at the Fed in January. But it seems the prospect of tapering has become much less clear and certainly looks unlikely this year, especially if government makes little clear progress towards a fiscal policy agreement."
"US yields have dropped sharply viewing US economic confidence dampened by the fiscal impasse and a Fed that decided not to taper QE. This may provide support for the housing market and help underpin the US economy, but puts downward pressure on the USD."
"The next month or three may be one of the weakest periods for the USD since late 2010/2011 QE2. The best hope for the USD is if Congress can make significant progress in closing their ideological gap on how to set longer term budget goals. The good news for them is that expectations are currently very low."