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Forex pairs in this Article » EUR/USD (London) - Jane Foley, Senior Currency Strategist at Rabobank said that while our best guess is that a December taper is unlikely, what is clear is that whispers about Fed policy still have an enormous power on risk appetite.

Key Quotes:

“Since Fed Chairman Bernanke first talked about tapering back in May, authorities in many emerging markets have been stressing the point that the power of the Fed extends well beyond the US borders”.

“Janet Yellen will take over the helm of the Fed early next with an unenviable task of paring back the Fed’s extraordinary policy which keeping world growth on a sustainable course”.

“We expect that this will not be a job that can be approached or completed hastily. In our judgement the Fed is unlikely to start tapering its QE until March 2014”.

“While comments from Fed hawks in the coming weeks are likely to inject some volatility into the market, we expect the overall tone of the USD to remain soft until early next year when we expect the USD to finally claw back some ground. Our 3 mth forecast for EUR/USD stands at 1.3400”.
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