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25 Jun 2013
Flash: USD gains to extend - TD Securities
FXstreet.com (Córdoba) - Markets have calmed somewhat after the big moves in recent trading days, and along with lower volatility the theme among most asset classes is retracement, while in the FX space, the USD has softened modestly from its recent strong and broad gains, says the TD Securities team.
According to TD, QE expectations from the Fed and liquidity conditions in China (as the main EM representative) remain the big focus, and yesterday's comments from Fed members and the PBoC served to quell expectations that accommodation will be imminently pulled away. "Those developments have been credited with the overnight bounce in markets, but after the significant moves we've seen in the aftermath of last week’s FOMC meeting, markets were due for a bit of a consolidation".
"Most of the majors have come a long way in a short period of time, which leaves scope for further retracement in the very near term", TD analysts comment. "Looking to the weeks and months ahead though, we expect USD gains to extend".
According to TD, QE expectations from the Fed and liquidity conditions in China (as the main EM representative) remain the big focus, and yesterday's comments from Fed members and the PBoC served to quell expectations that accommodation will be imminently pulled away. "Those developments have been credited with the overnight bounce in markets, but after the significant moves we've seen in the aftermath of last week’s FOMC meeting, markets were due for a bit of a consolidation".
"Most of the majors have come a long way in a short period of time, which leaves scope for further retracement in the very near term", TD analysts comment. "Looking to the weeks and months ahead though, we expect USD gains to extend".