Currency Note US Dollar

Will the Federal Reserve start to taper?

By Smart Currency September 16th, 2013

The US dollar finished off last week in disappointing fashion, as a number of economic indicators failed to meet expectations. Both sets of retail sales figures and the preliminary consumer sentiment data all came out worse than predicted. This prompted investors to lessen their expectations of the Federal Bank aggressively reducing its stimulus package at this weeks Federal Open Market Committee (FOMC) meeting as it appears the economy is not recovering as fast as expected. As a result, even if the central bank does decide to start to taper its quantitative easing program, many now believe the cuts would be moderate and in turn won’t have as big a reaction in the markets as first anticipated. Today, no major data is due from stateside but tomorrow will bring the more influential core consumer price index data. Wednesday holds the biggest event risk of the week where we will see if the FOMC decides to taper its quantitative easing program and if so, how aggressively it chooses to taper. Alongside this announcement, the central bank will give an overview and outlook on the US economy. Other data released this week includes existing home sales figures, the Philadelphia manufacturing index and several members of the FOMC will be speaking on Friday. Call your trader now to hear the latest rates on the US dollar, in a crucial week for the currency.