STEPPING OUT OF QE DRIVES USD STRENGTH
• USD is strong on FOMC hint that QE will be tapered in September and be completed by mid‐2014. Expect further upside into year‐end.
• CAD is weak on FOMC & weak Chinese PMI—a dual weight.
• EUR is weak, ignoring an improvement in PMIs. FinMin today.
• GBP is weak, but down only –0.1%, supported by improving retail sales.
• NOK is weak, down 2.8%, as a dovish Norges Bank weighs heavily.
• CHF drops 0.4%; the SNB reiterates the importance of EURCHF floor.
• JPY is down 1.3% on Fed and positioning readjustment.
• AUD collapses to 2.5year low as deterioration in China adds to weights.
• Near‐term risks: EURUSD to drop to 1.3075 & USDJPY to rally to 99.47.
Read the full report: FX Daily
Scotiabank