EUR/USD: Outlook still uncertain (we keep our short position, but have lowered the stop-loss level) Fed’s chair Janet Yellen did not comment on the economic outlook after investors reappraised the Feds likely policy path. Yellen did not comment on the volatility of financial markets or on monetary policy. Instead, she was speaking on widening economic inequality in the United States. Boston Fed President Eric Rosengren (dovish, does not have a rotating vote on Fed policy until 2016) said the recent volatility in financial markets reinforces the need for the Federal Reserve to be patient with its policy stimulus and to clearly tie an eventual interest-rate rise to improving economic conditions. Rosengren backs ending quantitative easing this month unless something dramatic happens. His comments reflect the dovish point of view and show there is no support from the doves for extending QE. The current account balance in the Euro zone amounted in August to EUR 18.9 bn (seasonally adjusted) vs. EUR 21.6 bn in July, mainly due to lower foreign trade surplus. The run of better U.S. data at the end of last week (industrial production, higher consumer sentiment reading and better-than-expected housing numbers) left the fundamental picture in favour of the USD. However, further dovish comments from the Fed officials may strengthen the EUR/USD. We keep the target of our short EUR/USD position at 1.2710, but have lowered the stop-loss level to 1.2810, just to save our small profit. We do not see potential for a strong decline of the EUR/USD in the short term, but in our opinion the target is achievable.
Posted on: Mon, 20 Oct 2014 16:54:49 +0000
Trending Topics
Recently Viewed Topics
© 2015