FX Week 23 June 2013

FX Week

FX landscape turning more volatile

With the Fed having signaled its willingness to start tapering QE, Japan continuing its ‘monetary policy revolution’ and Eurozone stability coming back under the spotlight, currency markets are likely to have a hot summer and a volatile H213. Emerging markets are already reflecting the renewed uncertainty, with China’s growth slowing and its financial markets under stress. As the end of H113 approaches the USD is already resuming the trend gains it saw earlier in the year, with USD/JPY in particular recovering recently lost ground. EUR/USD should also eventually break out of its H1 range to the downside, as both cyclical and structural issues continue to bear down on the single currency.
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