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25 Nov 2013
Flash: Central bankers not afraid to take extraordinary steps - Investec
FXstreet.com (Barcelona) - Jonathan Pryor, Corporate Treasury Analyst at Investec notes that Central bankers in the world’s largest economies remain comfortable to follow a path of expansionary policy judging by dovish comments last week from the ECB and the Federal Reserve about the extraordinary policy tools that they could use to affect their respective economies.
Key Quotes
“The market has paid particularly close attention to the testimony from the new Chair of the Fed, Janet Yellen, who supported QE in her speech the week before last which has caused EUR/USD to turn around and return higher back to where it was pre the ECB rate cut the week before.”
“Incidentally, the outgoing Chairman of the Fed, Ben Bernanke, has likely given his final speech and the phrase 'lower for longer' on rates was a telling sign of the future. An important development this weekend was a surprise deal between Washington and Tehran that may reduce concerns over the U.S. economic outlook, which in turn will further fuel global stock prices.”
“The U.S. and five other world powers agreed with Iran on Sunday to ease part of an economic stranglehold in exchange for steps aimed at capping Iran's nuclear program.”
“This, in addition to U.S. shale oil production, are expected to push down crude oil prices for the time being, a positive factor for the U.S. economy, and further reason for selling commodity linked currencies like CAD and NOK.”
Key Quotes
“The market has paid particularly close attention to the testimony from the new Chair of the Fed, Janet Yellen, who supported QE in her speech the week before last which has caused EUR/USD to turn around and return higher back to where it was pre the ECB rate cut the week before.”
“Incidentally, the outgoing Chairman of the Fed, Ben Bernanke, has likely given his final speech and the phrase 'lower for longer' on rates was a telling sign of the future. An important development this weekend was a surprise deal between Washington and Tehran that may reduce concerns over the U.S. economic outlook, which in turn will further fuel global stock prices.”
“The U.S. and five other world powers agreed with Iran on Sunday to ease part of an economic stranglehold in exchange for steps aimed at capping Iran's nuclear program.”
“This, in addition to U.S. shale oil production, are expected to push down crude oil prices for the time being, a positive factor for the U.S. economy, and further reason for selling commodity linked currencies like CAD and NOK.”