FX Update: The euro has remained bid
FX Update: The euro has remained bid, despite a report of there not being a consensus among ECB policymakers about when to begin tapering. EUR-USD logged a nine-day high at 1.2020 and EUR-JPY remaining buoyant, although below the 22-month high seen yesterday. USD-JPY, meanwhile, has settled to a consolidation after rallying quite strongly over the last week amid a risk-on backdrop in global financial markets, which the yen tends to correlate inversely to, and as markets anticipate the Fed and BoJ policy announcements, due today and tomorrow, respectively. The Fed is widely anticipated to announce the start of a gradual program to balance its balance sheet (quantitative tightening), and while the central bank is likely to leave the Fed funds rate unchanged, analysts anticipate sufficiently hawkish undertones in its revised projections and statement to give the dollar a bid. The BoJ by contrast is expected to reaffirm its commitment to ultra-accommodative policy given tepid inflation and policymaker concerns that economic growth continues lack self sustainability.