Week in FX Americas – Fed Member questions QE3 impact

September 28, 2012 Share Print 0

The week ended with all eyes on Spain as the Banking stress tests were released with better than expected figures. Europe stole the spotlight this week with protests and lower economic figures which deflated the currency versus the U.S. dollar.

In the United States the bigger stories had some Fed members playing down the potential effect of QE3 as defenders rose to justify the decision by the central bank and potential to increase the bond-buying program. The amount is considerable enough (40 billion a month) to show of the commitment of the Fed to boosting the economy. Some analysts think it won’t make a significant difference and could be a time extension from the Federal Reserve to see how the European crisis evolves. The decision could be made then to expand the program if needed.

The US election will continue to grow as we are near the first debate which will pit both candidates against each other. At the moment Obama leads in the polls, but with plenty of time before the elections and starting with the NFP next Friday a lot of economic data which could help or hurt the incumbent’s chances of reelection.

WEEK AHEAD

USD ISM Manufacturing
AUD Reserve Bank of Australia Rate Decision
GBP Bank of England Rate Decision
EUR European Central Bank Rate Decision
USD Fed Releases Minutes from Sept. 13 FOMC Meeting
JPY Bank of Japan Rate Decision
USD Change in Nonfarm Payrolls
USD Unemployment Rate
CAD Unemployment Rate

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.