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Forex pairs in this Article » EUR/JPY, EUR/USD (Barcelona) - The Danske Bank research team note that the Federal reserve and the Bank of Japan are the two central banks currently easing monetary policy most aggressively and the dollar and the yen are weakening against most other currencies as a consequence.

They expect this to continue into 2013, as the effect on risk markets has not yet fully materialised. They see short term risks as being naturally skewed to the downside in EURUSD and EURJPY from the fiscal cliff, but it is important to note that the current US growth out performance is not enough to lift the dollar.

The team believe that it has always been difficult to trade EURUSD on growth differentials and usually this only works when reflected in relative monetary policy, which is obviously not the case at the moment. Elsewhere, they feel that BoE minutes could effect sterling but they are expecting GBP weakness to be a mid 2013 story.
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