Forex Strategy Video: What the Taper Means for the Dollar
• While the $10 billion Taper isn't the end of US stimulus, it is a meaningful change in tack
• With the Fed applying the break, no where does the contrast look so great than with USDJPY
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The Fed's first move towards Tapering carries with it many implications for the markets and the dollar. Yet, from a big picture view, this change of tack can significantly bolster the greenback's appeal. Just as the Euro has advanced on the back of its balance sheet reduction on LTRO repayments and the British pound has rallied the past six months on rate expectations, the US central bank has taken its first step towards ending its stimulus regime and eventually withdrawing the accommodation. The full turn in policy and benefit to interest rates and currency are still far off. But these are forward looking markets. We discuss important fundamental factor and its trade implications in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.