Ultimately, the ECB will lower rates. I don't think they wanted to be forced into doing it.
Ultimately, the ECB will lower rates, ... I don't think they wanted to be forced into doing it.
We're still going to get Japanese rates at zero for some time yet. The Fed continues to underpin the view that more rate hikes are highly probable, and yield premiums favor the dollar in the short term.
We've seen the rate spread narrowing over the course of 2005, and sterling has had a poor run against the dollar. The pound could come under pressure toward the end of the first half.
We've seen a very good run in the dollar but it's been the case in the past few weeks that it hasn't been able to make much momentum on the back of what's been pretty good economic data,
Since the election was called the yen has performed pretty well and it may well be the case that people are reluctant to chase it higher.
If we continue to see strong data coming through talk of higher rates will be perpetuated. Sterling has a pretty positive background.
Japanese authorities seem very comfortable with the value of the yen and investors are keen to buy. Given that there are questions about the U.S. rate cycle, people are becoming more confident in betting on the yen.
I think euro bulls were disappointed by the ECB,
People are looking ahead to the CPI data tomorrow that I think will probably continue the presumption that the Fed has still got a little way to go with hiking.
I think probably yesterday's move was a little bit overdone but obviously we've broken through some reasonably sizeable technical levels and that does beg the question as to whether there is a bit further to run.
M&A activity is likely to prove supportive for sterling and with recent economic data suggesting there is no risk of lower rates any time soon, I think the backdrop remains fairly constructive.
M&A activity has been a key influence on sterling over the recent weeks and months ... and if that's going to be a continuing theme, then that will at least provide a floor for sterling.
We probably are at the bottom of the economic cycle and that would suggest that there is some modest light at the end of the tunnel particularly in terms of an improving export backdrop, ... The euro is at a much more competitive level than we were seeing at the tail end of last year.
The fact that two ministries that are key to reforms are not in the hands of the CDU is fairly disappointing. With the risks of policy paralysis, it's another reason to stay away from the euro.
There's scope for the euro on the downside especially if the riots continue. It's another reason to sell the euro.
The statement was a lot more forceful than the market was expecting and that has given Asian currencies a strong boost. Japan is going to have to tolerate a stronger currency, like the rest of the countries in the region.
The narrowing in the spread between two-year bunds and Treasuries is very important, as the interest-rate spread argument is one of the main arguments driving the dollar. I don't think we will have enough momentum to power aggressively against the euro by the end of the year.
They are situated in Europe, but the majority of their business is in dollars,
There's a growing perception that 4.5 percent is not going to be the peak in the current cycle.
It's all very well releasing a little bit of extra oil, but the other problem is logistics with refining. Refining capacity is under serious pressure in the South of the U.S., and extra supply isn't going to alleviate the refinery shortage.
It's not surprising we have seen a sizeable hit in the euro. There was a reasonable perception it would be a close-run election and everybody's worst case scenario has come to pass,
It's a positive background for the yen, and investors are coming back in after a large move yesterday. The economic recovery looks pretty durable and we'll be seeing the end of deflation soon.
Confidence in the housing market helps consumer spending. That'll be supportive for sterling and it's not going to play too well with the shorter end of the gilt curve.
The North Korea news is also likely to be positive for the dollar.
The U.S. economy is still powering ahead and that keeps the market firmly focused on the fact that the Fed has further to go. With yield spreads widening out again the dollar can keep rallying.
The U.S economy is continuing to grow strongly and so there's plenty of justification for the Fed to keep raising rates. The dollar's pre-eminence is going to be maintained against the yen and the euro.
At the same time we had Greenspan reinforcing that the U.S. growth backdrop and rate outlook are positive for the dollar.
The Fed is going to hike more than the market is anticipating. A crossover would inevitably put more pressure on the pound.
Interest rates, I think, will start to fall in the U.S. in 1999, suggesting that the Euro will outperform the dollar in the early stages.
Cable (sterling/dollar) could go lower in the first half of the year as we think the Fed will continue to hike rates, but in the second half we might see a recovery in sterling.
The market got ambitious in what they were expecting from the Fed. The fact that the statement mentioned energy costs having some impact on consumer spending led some to be a bit cautious on the future growth outlook.
The euro is trying to grind higher but it's still in a range. The tone of a post-decision press conference will be important.
The market is getting bulled up on the China angle once again and dollar/yen has followed that,
The Japanese are clearly pretty happy with the level of the yen. There's quite a long way for the yen to go before officials will become concerned.
