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19 Sep 2013
Flash: Yen in focus post FED - BMO
FXstreet.com (London) - Stephen Gallo, Head of European FX Strategy at BMO puts the Yen in focus post FED.
Key Quotes:
“Over the very near-term, we are content to view these moves across markets as perfectly reasonable. Speculation will build from here that the Fed is essentially content to view the constant flow of monthly asset purchases as already constituting a form of “QE tapering”, since the proportional rate of increase in the Fed’s balance will continue to decline from here”.
"He continued to say that versus most of the following currencies, NOK, SEK, NZD, CHF and AUD the JPY should more or less remain a sell on rallies more than versus the USD until the Fed cements the idea in our heads that a reduction in QE is highly likely before year-end, or until something occurs which is big enough to drive investors away from “risk”.
Key Quotes:
“Over the very near-term, we are content to view these moves across markets as perfectly reasonable. Speculation will build from here that the Fed is essentially content to view the constant flow of monthly asset purchases as already constituting a form of “QE tapering”, since the proportional rate of increase in the Fed’s balance will continue to decline from here”.
"He continued to say that versus most of the following currencies, NOK, SEK, NZD, CHF and AUD the JPY should more or less remain a sell on rallies more than versus the USD until the Fed cements the idea in our heads that a reduction in QE is highly likely before year-end, or until something occurs which is big enough to drive investors away from “risk”.