USD IS STRONG; YIELDS ARE RISING; EQUITIES ARE WEAK
• USD is strong led by a steepening US curve, with 10‐yr at 2.6%.
• FX focus is on impact of Fed tapering & impact on growth.
• CAD is weak reacting to US Fed policy & risk of deteriorating in China.
• EUR is flat with minimal news flow. As expected EFSF extends loan maturities; German IFO as expected. Draghi speaks tomorrow.
• GBP is weak on limited data following broader flows.
• JPY is flat as Tokyo regional elections provide support for Abe. Risk is CPI late this week. Yields support higher USDJPY but equities don’t.
• AUD falls on broad USD; PM Gillard supports weak AUD is no surprise.
Read the full report: FX Daily
Scotiabank