FED TAPERING FEARS DRIVE FX—MINUTES LOOM WED
• USD strong against EM & growth FX; weak against other majors.
• FX driven by rising fears that FED will hint at tapering in Wed minutes.
• CAD drops reacting to tapering and growth fears. Technicals are weak.
• EUR is strong, briefly touching a 2-month high, on flows out of EM. We expect EUR strength to ease and be replaced by weakness.
• GBP is strong for similar reasons to EUR; few domestic developments.
• JPY is strong reacting to risk aversion and Asian flows.
• AUD is weak after RBA highlights importance of weakening currency.
• IDR sinks 1.8% to multi year low on outflows; INR at fresh record low.
Read the full report: FX Daily
Scotiabank