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Forex pairs in this Article » EUR/USD, USD/JPY (Barcelona) - Danske Bank Strategists note that on a day set to be quiet in terms of events, USD crosses will be digesting the Fed messages earlier in the week in a market likely characterised by waning liquidity as the holiday week approaches.

Key Quotes

“USD/JPY was little changed on a BoJ meeting that ended widely as expected. EUR/USD has continued its losing streak overnight.”

“Four reasons why EUR/USD has peaked the announcement of Fed tapering is a first leg for the EUR/USD downside we look for into 2014.”

“However, this is not the only reason we think the cross has now peaked. In order to see a sustained move lower towards the mid 1.20s for EUR/USD next year, the US recovery needs to continue as well as the ECB to react swiftly to weaker-than-projected inflation.”

“The latter will in our view be the key driver of a move lower in the cross in Q1 as would an expected easing of current euro-zone liquidity issues.
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