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Forex Flash: FED to sustain QE into 2014 – Capital Economics

By FXstreet.com,  January 03, 2013, 06:15:00 PM EDT

FXstreet.com (Barcelona) - With the FOMC meeting minutes sparkling speculation over end of QE sooner than market expects, Chief US Economist at Capital Economics Paul Ashworth says, and 10 year US bond up more than +4% today alone, which means yields climbed above the 1.9% level, highest since May 2012, USD also had a lift above 80.50 in the USD index, around fresh 3-week highs.

Either the FED ends QE or not, wont be a matter of a single day decision: "Ultimately, it is the prevailing economic conditions that will determine when the Fed halts or slows the pace of its asset purchases," Paul expands, adding: "We suspect that another year of lacklustre economic growth in 2013, coupled with only a modest improvement in the unemployment rate, will persuade the Fed to sustain QE into 2014," the analyst concludes.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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