Forex Analysis

Fed sticks to the tapering game plan

The Fed decided today to trim its monthly bond purchases by USD 10bn, as widely expected. With a slightly more positive tone on the economy,

Economy Watch – RBNZ Beefs Up Hawkish Talk

We have been critical of the Reserve Bank for delaying the removal its OCR super-stimulus, while economic momentum and inflation risk has accumulated so much.

First Reaction: No Surprises From FOMC; Marking Time For March

The following is SEB Group’s first reaction to today’s FOMC policy decision.

Steady hand: RBNZ OCR Review

As expected the RBNZ to left the OCR at 2.5% and clearly signalled its intention to hike in March. This portrays a central bank that is calmly preparing for a steady OCR hiking cycle.

USDJPY – bear flag threatening call for a marginal rally to test highs

The bounce from our proposed support zone (101.77) has proven to be choppy and has the hallmarks of a correction. The rally from the low has formed, and broken down from, a bear flag.

EURUSD – downside break of 1.3630/3686 range implies move to 1.3580

We have been treating the rally to 1.3750 as the final leg of a wave-(2) correction. Now the Euro is again threatening to break the uptrend from July as the downtrend reengages.

EUR Mid-day Analysis

Without the looming threat of taper from the US, the Euro would probably be enjoying gains in the wake ofanother impressive German Consumer sentiment reading overnight.

CHF Mid-day Analysis

A slight decline in safe haven interest from the emerging markets situation might temporarily return in theaftermath of a US Fed tapering move, but that support for the Swiss might be fleeting.

JPY Mid-day Analysis

The Yen has seen a subtle shift in sentiment in favor of the bear camp as the actions of several centralbanks has quelled safe haven interest.

USD Mid-day Analysis

Somewhat impressively the Dollar has managed to hold above the prior session’s close in the face ofaggressive foreign central bank action to quell the emerging market threat.

The Canadian saw a fresh lower low overnight and that suggests the path of leastresistance remains down technically. Fundamentally it is difficult to discount the potential impact on the Canadian economy from

GBP Mid-day Analysis

An inside day down on the charts, a lack of fresh UK data flows and the looming US Fed decision wouldseem to provide some pressure to the Pound. From the mid January lows,