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13 Mar 2014
Flash: USD weakness persists - BTU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, notes the increasing weakness around the USD.
Key Quotes
"The US dollar has continued to weaken in the Asian trading session with the dollar index extending its modest decline since the beginning of February. The US dollar has been undermined in the near-term by the recent economic slowdown in the US which has prompted the market to dampen Fed monetary tightening expectations ahead although it is still expected to taper QE by a further USD10 billion at next week’s FOMC meeting."
"The release yesterday of prepared remarks from Fed Vice Chairman nominee Stanley Fischer ahead of his confirmation hearing today before the Senate Banking Committee revealed that he supports the “continuation of an expansionary monetary policy even though the degree of expansion is being gradually and cautiously cut back”.
"Current Fed monetary policy easing also appears relatively more dovish after the ECB recently raised the hurdle for further monetary easing in the near-term while in contrast its balance sheet continues to contract having fallen from to around 23% of GDP from a peak of 33% of GDP in June 2012. It is now modestly smaller than the Fed’s balance sheet which is on course to expand to around 25% of GDP later this year assuming QE is brought to an end."
Key Quotes
"The US dollar has continued to weaken in the Asian trading session with the dollar index extending its modest decline since the beginning of February. The US dollar has been undermined in the near-term by the recent economic slowdown in the US which has prompted the market to dampen Fed monetary tightening expectations ahead although it is still expected to taper QE by a further USD10 billion at next week’s FOMC meeting."
"The release yesterday of prepared remarks from Fed Vice Chairman nominee Stanley Fischer ahead of his confirmation hearing today before the Senate Banking Committee revealed that he supports the “continuation of an expansionary monetary policy even though the degree of expansion is being gradually and cautiously cut back”.
"Current Fed monetary policy easing also appears relatively more dovish after the ECB recently raised the hurdle for further monetary easing in the near-term while in contrast its balance sheet continues to contract having fallen from to around 23% of GDP from a peak of 33% of GDP in June 2012. It is now modestly smaller than the Fed’s balance sheet which is on course to expand to around 25% of GDP later this year assuming QE is brought to an end."