21 Nov 2013
Flash: EUR support despite dovish threats - Rabobank
FXstreet.com (Barcelona) - Strategists at Rabobank said EUR/USD will remain well supported in spite of the dovish threats of the ECB.
Key Quotes:
“The market’s current obsession with Federal Reserve policy and the timing of any tapering means that the Fed has to tread extremely carefully even when airing views about the winding down of its liquidity provision”.
“Meanwhile disinflationary pressures and the continued slack in the US labour market has meant that the Fed is promising very accommodative policy settings for a prolonged period even after QE has come to an end”.
“Currency wars are discernible within the G10. The BoJ, the ECB and the SNB amongst others have pledged low interest rates for a long time. Each of these central banks is adverse to the monetary tightening that a weaker USD imposes on them, but not all can expect to see their respective currencies simultaneously weaken”.
“Currency strength will exhibit itself at the point of least resistance and we maintain that until Fed tapering is upon us, that EUR/USD will remain well supported in spite of the dovish threats of the ECB”.
Key Quotes:
“The market’s current obsession with Federal Reserve policy and the timing of any tapering means that the Fed has to tread extremely carefully even when airing views about the winding down of its liquidity provision”.
“Meanwhile disinflationary pressures and the continued slack in the US labour market has meant that the Fed is promising very accommodative policy settings for a prolonged period even after QE has come to an end”.
“Currency wars are discernible within the G10. The BoJ, the ECB and the SNB amongst others have pledged low interest rates for a long time. Each of these central banks is adverse to the monetary tightening that a weaker USD imposes on them, but not all can expect to see their respective currencies simultaneously weaken”.
“Currency strength will exhibit itself at the point of least resistance and we maintain that until Fed tapering is upon us, that EUR/USD will remain well supported in spite of the dovish threats of the ECB”.