FOREX VIEW

Focus On The Fed Blinds Market To Other Themes

Posted by Pat Sullivan on November 02, 2010
Dow Jones Newswires Column, FOREX VIEW, Federal Reserve, U.S. Economy, World Economy / 1 Comment
By DON CURREN
A DOW JONES NEWSWIRES COLUMN

It has become a pair of powerful headlights on the highway that blind you to everything else.

Currency markets are so focused on the possibility of further quantitative easing from the U.S. Federal Reserve that other market drivers have receded into the background.

They are still there, but only dimly visible at best.

But once the Fed unveils its stimulus plan Wednesday–and the market absorbs its impact–those other themes could resurface with a vengeance.

“I would say [the market] has had collective myopia vis-a-vis QE,” said Jeremy Stretch, foreign-exchange strategist at CIBC World Markets in London.

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