Forex Flash: Twist replacement could help EUR/USD – NAB
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EUR/USD
FXstreet.com (Barcelona) - Ray Attrill, FX Streategist at National Australia Bank believes that an announcement by the FOMC next week that it is to start buying US Treasuries outright when Operation Twist ends could help push EURUSD higher.
However, he suspects that the main obstacle to any push higher will unsurprisingly be the lack of evidence towards a compromise between US lawmakers in moving towards a compromise on fiscal policy measures that will prevent the US falling off of the fiscal-cliff on December 31st.
He notes that House Speaker Boehner has now proposed a plan entailing $800 bln in new tax revenue (but not higher tax rates) and $1.2 tln in spending cuts ($300bln in discretionary spending and $900bln in entitlement or mandatory spending) which Attrill is sure will be roundly rejected by the Democrats at such an early stage in negotiations.
However, he suspects that the main obstacle to any push higher will unsurprisingly be the lack of evidence towards a compromise between US lawmakers in moving towards a compromise on fiscal policy measures that will prevent the US falling off of the fiscal-cliff on December 31st.
He notes that House Speaker Boehner has now proposed a plan entailing $800 bln in new tax revenue (but not higher tax rates) and $1.2 tln in spending cuts ($300bln in discretionary spending and $900bln in entitlement or mandatory spending) which Attrill is sure will be roundly rejected by the Democrats at such an early stage in negotiations.
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