Budget approval supports a taper
City Index December 11, 2013 3:47 PM
<p>The chances of a small taper from the Federal Reserve next Wednesday evening increased overnight with news that a budget deal has been agreed. The […]</p>
The chances of a small taper from the Federal Reserve next Wednesday evening increased overnight with news that a budget deal has been agreed. The terms of the agreement that still need approval from congress show an increase in spending for 2014 to $1.012 trillion and to $1.014 trillion for 2015. The outcome if approved by congress is likely to ease concern from the Fed that a debt ceiling can be agreed early next year thus avoiding another government shutdown.
The FX market is focusing on the taper debate with the fence very heavy ahead of the outcome that has analysts very divided on whether we get a small token taper or nothing until 2014. There are no data releases of any substance today so I believe like we have seen with the JPY strength this week positioning is likely to dominate with a focus in euro/$ at the 2013 high of 1.3835.
Supports 1.3730-1.3690-1.3650 | Resistance 1.3800-1.3835-1.4000
Supports 102.25-101.85-101.60 | Resistance 102.95-103.40-103.75
Supports 1.6410-1.6350-1.6300 | Resistance 1.6460-1.6500-1.6620
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