Back
5 Jun 2013
Flash: Market volatility steadies FOMC stance – UBS
FXstreet.com (Barcelona) - “One possible explanation for FOMC policy resilience post-ISM is that equity market volatility – despite being Japan led – was already rising and sentiment in several risk markets, especially Emerging Market FX, had deteriorated sharply.” suggests Research Analyst Gareth Berry at UBS.
Investors may have easily psychologically accepted these developments as continuity from a soft data start to Q2 and the policy shifts stated above. In short, expectations were already weak which made the numbers easier to absorb. In any case, so far this year the dollar has not displayed any changes in performance sensitivity to data surprises, though this will certainly change up ahead if the dollar’s risk beta becomes more apparent.
Investors may have easily psychologically accepted these developments as continuity from a soft data start to Q2 and the policy shifts stated above. In short, expectations were already weak which made the numbers easier to absorb. In any case, so far this year the dollar has not displayed any changes in performance sensitivity to data surprises, though this will certainly change up ahead if the dollar’s risk beta becomes more apparent.