Earlier this year it seemed impossible to think that EURUSD would appreciate when the prospect of Fed tapering was gathering pace; but this is exactly what is happening. The November labour market report was unambiguously good news for the US (203k jobs were created and the unemployment rate fell to 7%, a mere 0.5% above the Fed’s unemployment threshold).This has led to the Wall Street Journal’s Fed watcher Jon Hilsenrath to write on Monday that Federal Reserve officials are now “closer to winding down” their $85bn per month asset purchase programme. While we doubt that the Fed will move in December, the recent pick up in US economic data makes the January meeting a potential start date for tapering.
Read the full report: Market Talk