Bank Research Consensus Weekly 08.27.12
FX: Fed Puts Dollar Under Pressure
Arne Lohmann Rasmussen, Chief Analyst, Danske Bank
Last week we published our new quarterly FX Trends publication. We argue that the dollar will suffer this autumn against the euro and the cyclical currencies. Basically, our view is three-legged: 1) the Fed is expected to engage in quantitative easing, which is expected to weigh on the US dollar, 2) the ECB is expected to restart its bond purchase programme and 3) China is expected to add further stimuli.
FOMC Signals Bias to Ease Policy
John E. Silvia, Chief Economist, Wells Fargo
On Sept. 12-13, the Federal Open Market Committee (FOMC) meets and our expectation is that it will not announce QE3 but continue with Operation Twist. Our view is that any move to further quantitative easing is less likely than continuing the current policy of large scale asset purchases.
U.S. – On Substantial and Sustainable
James Marple, Senior Economist, TD Bank Financial Group
This week, the Federal Reserve released minutes from its meetings on July 31st and August 1st. Usually the minutes are not a source of substantial new information about the future course of policy, but these minutes were an exception. In them, “many members” of the Federal Open Market Committee (FOMC) stated that, “additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery (emphasis added).”
Compiled by David Song, Currency Analyst
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