Central bankers in Japan, Britain, and the euro zone were facing high investor expectations when they had their meetings this week — and it appears they have delivered.
The Bank of Japan is embarking on a monetary easing campaign more aggressive than anything it has attempted in years, while the European Central Bank has reopened the door to further easing later in the year. Even the relative lack of action by the Bank of England is giving the market fodder for trades.
Currency experts reading the tea leaves from the central bank news are focusing on different elements, but for most of them, one theme is emerging loud and clear: with the outlook for the U.S. economy improving while weakness remains in other G4 countries, central bankers in Britain, Japan, and the euro zone are if anything committed to more aggressive easing, which means the dollar is poised to dominate in the near term.
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