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Forex pairs in this Article » EUR/USD (Barcelona) - Christin Tuxen, Senior Analyst at Danske Bank notes that focus in the FX sphere is on emerging markets digesting the aggressive Turkish move last night; notably, there is a risk that the South African central bank may disappoint investors by not hiking rates today.

Key Quotes

“Otherwise, with the Fed set to be on autopilot and markets likely not expecting much but a smooth handing over from Bernanke to Yellen, today’s FOMC meeting should have little potential to upset USD.”

“It would likely require a more dovish twist to the statement – e.g. in the form of an even less aggressive rate guidance - to send the greenback much weaker in the current environment where EM worries arguably still owe USD some upside.”

“Notably a relatively hawkish Fed that manages to see through recent US data weakness could prove the real test of whether the EM jitters are truly waning.”

“At the end of the day, EM (aka risk) sentiment may indeed turn out more important for NOK than the Norwegian unemployment report: NOK is one of the G10 currencies most exposed to a continued sell-off in the EM region.”
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