FXstreet.com (Barcelona) - The FOMC minutes has signaled what may represent the final hint before QE3 is finally launched, after Fed members stated they would ease policy soon if there were no ‘substantial and sustainable’ pickup in economic growth. While markets are poised for a traditional asset purchase, "it isn’t the only option" NAB notes.
Other alternatives, according to NAB, "remain an extension of the low level of rate language out from 2014 and moving from a date to being conditional on economic activity; on its own, this would be disappointing. In conjunction with purchases it might be more powerful. The lowering of interest on reserves appears to be a less favourable choice."
Looking at the possible USD performance, "is likely to remain under pressure, and that leaves AUD/USD above 1.05" NAB suspects. However, a final advice of prudence is given by the bank: "We may have to wait until Jackson Hole before the market really changes its mind, again."
Other alternatives, according to NAB, "remain an extension of the low level of rate language out from 2014 and moving from a date to being conditional on economic activity; on its own, this would be disappointing. In conjunction with purchases it might be more powerful. The lowering of interest on reserves appears to be a less favourable choice."
Looking at the possible USD performance, "is likely to remain under pressure, and that leaves AUD/USD above 1.05" NAB suspects. However, a final advice of prudence is given by the bank: "We may have to wait until Jackson Hole before the market really changes its mind, again."
