Forex Flash: FX majors react to talk of US suspension of easing – Investec

FXstreet.com (Barcelona) - The GBP/USD’s struggle to grind higher faltered once again at the end of last week as a resurgent dollar took the pair back down to 2-week lows in the 1.5300s. According to Lee McDarby, Investec Corporate Treasury, “The dollar is back in vogue at the moment with talk of the States exiting its quantitative easing program, better economic data Stateside and suggestions that the Chinese will increase their USD reserves.

Meanwhile, the EUR/USD has broken lower through 1.3000 although the key event in terms of rates last week was the USD/JPY finally breaching the 100 mark. This is great news for Prime Minister Abe and Finance Minister Kuroda who recently embarked on measures through the Japanese Central Bank with the aim of weakening the Yen to improve the Japanese export market. If the theme of USD strength continues this week then we could see the GBP/USD drift even lower with 1.5280 being watched as a key support level.