In fact it is unlimited and coupled to fundamental aspects of the economy. The Fed has clearly said that the unemployment rate is too high and the policy makers are willing to purchase $40 billion worth of mortgage-backed securities to stimulate the economy, and to bring down financing conditions as long as unemployment rate has not come down substantially.
If they do not, the Euro will move back, probably below 1.28-level. If they do, I think the market will attempt to take EUR/USD to a 1.30-figure.
As the Swiss economy weakens and deflation gets established in Switzerland, the Swiss Franc will weaken on its own accord, particularly if the recent ECB's bond-buying policy is successful in stabilizing the Eurozone
It is pretty much pre-announced that they are going to engage in conditional bond-buying, meaning that they are going to buy the bonds of some European countries. That is contingent upon these countries, which are applying for Troika's financial support that is seeking a conditional aid-driven programme.
Technically it is justified, because if components of the European Union, including the most important and healthiest economies such as Germany, the U.K., and the Netherlands get a negative outlook attached to their triple A rating, then it is logical that the EU will also get such a negative outlook. Thus, from the technical point of view I can understand
It was a very slight disappointment. In the run-up to Ben Bernanke's speech, EUR/USD gained some ground.
Representatives of the European Commission, the International Monetary Fund and the European Central Bank, also known as Troika, are currently evaluating Greece's efforts to revive its economy and will report back on their findings in early October. Dukascopy Banks SA interviewed David Kohl, Deputy Chief Economist at Julius Baer Group, to find out his expectations concerning the Troika's report.
The Japanese government downgraded its economic assessment for the world's third-biggest economy. Junko Nishioka, Chief Economist at RBS Securities Ltd, provided her insight into the reasons behind this decision, her expectations concerning possible BOJ actions, and outlook for the Japanese economy.
After 18 years of negotiation, Russia eventually joined the World Trade Organization on August 22 and became 156th member. Dukascopy Bank SA conducted an interview with Vladimir Osakovskiy, Chief Economist at Bank of America Merrill Lynch, to find out the reasons why it took so long for Russia to join the WTO and what are the benefits of membership both
Currently our stance is long across the Yen.
I think the outcome of this meeting will be all in all supportive for the Euro, because lots of concerns about possible end of the bailout for Greece have already been priced into the Euro.
The Eurozone's current problems arise from a crisis of insolvency among some members. Eurozone policy makers, however, have reacted as though they are facing a liquidity crisis.
Germany is one of the strongest economies in the Eurozone. The labor market reforms that were enacted in the last decade have given Germany the flexibility to respond to the dynamic economic situation created by the financial crisis.
There has been a boost to sentiment towards the Euro over the past couple of weeks from a potential action of the ECB.
There is nothing at the moment that suggests it. The trend will not continue, but I think the Canadian Dollar is probably looking a little bit overdone at these levels.
Currently the Aussie is very well supported on dips, particularly given there is such a divergence between the Australian monetary policy, which is firmly on-hold at the moment, and the prospects of looser monetary policy in the U.S. and Europe.
I think the Yen is currently around its fundamental fair value, but before that a better level of the Yen has seen corporate profitability in Japan coming under some downward pressure.
The Sterling has gained despite the Bank of England announcements for further asset purchase and the new measures to support the economy such as funding for lending and etc.
Long positions in the US Dollar looked very stretched a month ago. What we are seeing now appears to be a gradual unwinding of long positions.
The performance of the Australian Dollar has been quiet strong and has been driven by two or three different factors.
Dr. Brycz, Professor of Microeconomics at the University of Gdańsk, on the commodity prices
The purpose of the austerity measures is to achieve a more or less balanced government's budget and, ideally, move towards reduction in the sovereign debt.
With the US economy growing slower than expected, QE3 is still on the Fed's table. While some officials argue that the QE3 should be implemented in order to stimulate the economic growth, others believe that in order the Fed to come up with the monetary accommodation there should be further deterioration of the economy. Dukascopy Bank SA interviewed Professor Knoop
What we are currently observing is that the pressure on the Euro is not subsiding, and thus we are seeing summit after summit.