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Forex pairs in this Article » EUR/USD, GBP/USD (Bali) - According to Robert Lynch, FX Strategist at HSBC, any USD rally, particularly against emerging market currencies, will likely prove short-lived.

Key Quotes

After taper, if bond markets take the outcome of this meeting well, the USD will struggle to advance. Similarly, the USD remains inversely correlated to US equity markets. If equities are relaxed, we believe the USD rally will fade."

"We believe it makes sense to sell any spike in the USD against the likes of the RUB, INR or MXN, where the initial adverse announcement reaction might be most potent."

"Similarly, in G10, we would look for a reversal of any EUR-USD, GBP-USD, or AUD-NZD dip, for example. The Fed may have tapered early, but the broader tone should not be a gamechanger for the FX market."
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