FXstreet.com (Córdoba) - For the FX market the crucial question concerns the impact of any new Fed move on the USD. Probably the biggest impact on the USD from a new Fed policy would be if it decides to pursue more QE and this induces a new wave of risk-on market activity, the HSBC team points out. "For almost all of the period since the beginning of the crisis, the USD has been a risk-off asset, tending to rise when risky assets are falling and vice versa".

"In the FX market, CAD is the most risk-on currency and the yen is the most risk-off", they explain. "However, the USD is still a strongly risk-off currency, so a new round of QE that sees a move towards risk-on would almost certainly see the USD give back more ground".