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20 Sep 2013
EUR/USD falls on Bullard hints of possibility of October taper before rebounding
FXstreet.com (London) - EUR/USD has seen some swings this afternoon after FOMC voting member and St. Louis Fed President James Bullard said a small taper could be possible in October.
The Fed surprised earlier in the week by maintaining its asset purchase program at USD85bn, rather than tapering by the consensus USD10bn.
In an interview with Bloomberg television, Bullard underlined that it had been a close decision whether to hold off on a taper at the September meeting, but that any data filtering through ahead of the next FOMC meeting on 29-30 October could influence a possible drop in asset purchases.
Bullard also stressed that the Fed also needed to maintain focus on the inflation half of its dual mandate, which also cites employment. The continued price pressures in the US give potential for the economy to dip into deflationary territory.
The surprising reference to the potential for an October taper sent EUR/USD down to USD1.3508, before recovering to USD1.3536.
US 10-year Treasuries currently stand at 2.75 percent.
The Fed surprised earlier in the week by maintaining its asset purchase program at USD85bn, rather than tapering by the consensus USD10bn.
In an interview with Bloomberg television, Bullard underlined that it had been a close decision whether to hold off on a taper at the September meeting, but that any data filtering through ahead of the next FOMC meeting on 29-30 October could influence a possible drop in asset purchases.
Bullard also stressed that the Fed also needed to maintain focus on the inflation half of its dual mandate, which also cites employment. The continued price pressures in the US give potential for the economy to dip into deflationary territory.
The surprising reference to the potential for an October taper sent EUR/USD down to USD1.3508, before recovering to USD1.3536.
US 10-year Treasuries currently stand at 2.75 percent.