Again, a recap – not new news.
Interesting thoughts from Citi re the direction of Fed monetary policy; they don’t think the market believes that the Fed’s stated commitments will be kept:
The foreign-exchange market is signaling to Citigroup Inc. that it isn’t yet convinced the Federal Reserve will fulfill its pledge to keep pumping record amounts of cash into the U.S. economy through 2015.
The U.S. Dollar Index has gained 2.2 percent since the central bank said Sept. 13 it would keep interest rates at record lows through mid-2015 and print $40 billion a month to buy bonds, …
While the Fed said it will keep the stimulus going even after data show the economy is improving, the foreign exchange market indicates that gains in U.S. employment, housing and consumer confidence may prompt changes in policy sooner. …
“Does the market really believe that the 2015 Fed is going to be constrained by the 2012 Fed?” Steven Englander, Citigroup’s New York-based global head of G-10 strategy, … “The answer is ‘no.’”
Citigroup Seeing FX Signals of Early End to Stimulus: Currencies