13 Dec 2013
Flash: Dollar supported on US Budget agreement - BTMU
FXstreet.com (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ notes that the latest support for the dollar came from the news that the House passed the agreed US budget deal last night – and passed it with ease; by 332-94 votes.
Key Quotes
“So in the space of a few days we may well get some clarity on the sources of policy uncertainty in the US that is likely playing a notable role in holding back the economy.”
“A two-year budget deal clears the political uncertainty and if tapering does commence this would also help alleviate uncertainty over what the impact of easing up on policy would be.”
“However, what is also clear is that a tapering announcement next week would not be a huge surprise for the market and must surely now be largely in the price.”
“USD/JPY is 3.5% higher since 20th November when yields started to turn higher in the US on a possible earlier tapering.”
Key Quotes
“So in the space of a few days we may well get some clarity on the sources of policy uncertainty in the US that is likely playing a notable role in holding back the economy.”
“A two-year budget deal clears the political uncertainty and if tapering does commence this would also help alleviate uncertainty over what the impact of easing up on policy would be.”
“However, what is also clear is that a tapering announcement next week would not be a huge surprise for the market and must surely now be largely in the price.”
“USD/JPY is 3.5% higher since 20th November when yields started to turn higher in the US on a possible earlier tapering.”