FX Week 5 May 2013

FX Week

Fed becomes more balanced

Last week saw three key events, from the Fed, the ECB and in terms of economic data. The Fed introduced the first element of surprise, restoring a balanced approach to QE by indicating a preparedness to either reduce of increase asset purchases dependent on the economic data. This followed a run of disappointing economic data, which raised concerns that the economic recovery in Q1 is already running out of steam. The shift away from a more hawkish tone caused the USD to weaken during the middle of the week, before recovering after the ECB meeting on Thursday.
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