Friday, October 29, 2010

The longest wait is coming to an end

Nearing the end of a week when he gave a really strong resistance, which allowed the main index of the dollar's rise by 0.70%. Only a pound could outstrip the dollar, moving the strength of both currencies has been the change of political expectations. The Fed began a new position QE as more restrained, this shift is due to the lack of cohesion in the FOMC and the pressure from the international arena, which does not suit U.S. policy, aimed at understating the dollar. ECB, Reserve Bank of Australia and Bank of England will meet next week, then monetary policy will become a leading driver of currencies.

Although most attention focused on the Fed, there are also risks of RBA tightening. The position of the ECB is a desire to leave everything unchanged, but in the new year to get rid of the "temporary" measures in the money market. They may experience difficulties with the growth of the real economy. Finally, the Bank of England is unlikely to change rates or to implement the second phase of the QE. Nevertheless, some policy changes are still likely in the coming months, either by QE, or reducing interest rates or changes in the way of reserves by the Bank of England.

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