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7 Oct 2013
Flash: USD would remain offered near term – Rabobank
FXstreet.com (Edinburgh) - The greenback has resumed its downward trend at the beginning of the week, amidst increasing uncertainties surrounding the US Government shutdown. Jane Foley, Chief Currency Strategist at Rabobank expects the greenback to underperform against the backdrop of the Fed delaying its QE tapering.
Key quotes
“There is some opinion in the market that the USD’s status as a safe haven will eventually win the day”.
“However, we would point out that the dollar index remained fairly directionless during the 2011 debt ceiling negotiations and during the 1995/86 17 day government shutdown. It did, however, manage a relief rally after compromises had been met”.
“Near-term, we expect the USD index to retain a downside bias based mainly on the perception that the Fed could decide that delaying tapering of QE is necessary to protect the economy from any negative fallout from the impasse”.
Key quotes
“There is some opinion in the market that the USD’s status as a safe haven will eventually win the day”.
“However, we would point out that the dollar index remained fairly directionless during the 2011 debt ceiling negotiations and during the 1995/86 17 day government shutdown. It did, however, manage a relief rally after compromises had been met”.
“Near-term, we expect the USD index to retain a downside bias based mainly on the perception that the Fed could decide that delaying tapering of QE is necessary to protect the economy from any negative fallout from the impasse”.