"While an increase of the monetary base was an appropriate tool for injecting liquidity into a dysfunctional financial market during the financial crisis of 2008, such a policy is increasingly inappropriate the more it only aims to target real economic objectives".
"The smaller the risk for such a scenario (Fed launching QE3) the more EUR-USD can come under pressure", the analyst said. "Therefore our advice: Remain USD bullish as long as QE3 risk is abating, but cut that position as soon as QE3 risk re-emerges".
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