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12 Jun 2013
Flash: USD choppiness will persist near term - RBS
FXstreet.com (Barcelona) - While there is a clear de-risking in recent weeks, the contributing factors are not exactly straight forward, says Greg Gibbs, FX strategist at RBS, who argues on the taper debate in the US still as the key factor.
"But it is a long taper, and the Fed is still in two minds. Recent lower inflation expectations and moderate growth and employment reports suggests it will not taper soon" Gibbs notes.
Gibbs makes a good point by saying that if it were just about a US taper, "we might expect the USD to be stronger against European currencies and the JPY, and it is not."
Looking forward, Gibbs sees "the weaker trends in several commodity currencies and Asian economies against the USD are likely to persist." However, in the near term, Gibbs thinks choppiness will persist and wary of major trends holding their course.
"But it is a long taper, and the Fed is still in two minds. Recent lower inflation expectations and moderate growth and employment reports suggests it will not taper soon" Gibbs notes.
Gibbs makes a good point by saying that if it were just about a US taper, "we might expect the USD to be stronger against European currencies and the JPY, and it is not."
Looking forward, Gibbs sees "the weaker trends in several commodity currencies and Asian economies against the USD are likely to persist." However, in the near term, Gibbs thinks choppiness will persist and wary of major trends holding their course.