Flash: EUR/USD and GBP/USD to retest highs on FOMC Taper cull? - UBS

FXstreet.com (Barcelona) - Syed Mansoor Mohi-uddin of UBS notes that the Fed's shift has thrown the whole timetable for tapering and ending quantitative easing into doubt.

Key Quotes

“The market reaction against the greenback has been swift and we expect over the next one to two weeks, longer-term asset managers will keep paring back dollar longs.”

“This suggests EUR/USD and GBP/USD can re-test their highs for the year of 1.37 and 1.64 respectively while USD/JPY stays heavy in its current 96-100 range.”

“Stocks, gold, commodity currencies and emerging markets should continue to similarly benefit until the end of September from the Fed's shift to keeping policy looser for longer.”