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Flash: a USD Sell off likely and positive for EM FX?

FXstreet.com (London) - Cristian Maggio, Senior Emerging Markets Strategist , Rates and FX Research at TD Securities
raised some concerns over the recent language used, which the market has taken on in favour of the dollar.

He said that while global EM FX remains under pressure, led by growing expectations that the Fed is looking for a QE exit strategy (Fed official Dudley inflated these expectations by acknowledging that balance sheet expansion is not risk-free), he thinks that Bernanke’s testimony today will reduce these risks, at least in the medium term.

So, while QE risks remain because of the need to unwind balance sheet expansion at some stage, this stage is still far from near and risks remain sublimated by broader policy objectives. He added, that in this respect, the message from the Fed should be taken dovishly by the market, as he expects the Fed to taper QE in the fall and not just yet.

Forex: EUR/CHF eases off highs to 1.2528/32

The EUR/CHF has been unusually active this week, edging higher during European trading, though operating off its session highs at 1.2565 in recent minutes.
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