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19 Jun 2013
Flash: Will market be risk-on or risk-off post FOMC? – UBS
FXstreet.com (New York) - Market participants have agonized over the past few sessions on how the dollar is going to react after Wednesday's Fed meeting.
Of course, opinions differ on what the Fed will actually say, so the market's dollar view is hardly uniform either. According to Research Analyst Geoffrey Yu at UBS, “To simplify things, we believe that whatever the Fed will say, the key determination to make in identifying dollar's reaction function will be whether the market will be in a risk-on or risk-off mode ex-post. Bond yields and stock indices will move accordingly, accompanied by commensurate currency moves. As of June, the dollar is a 'positive risk-beta' currency, but its status is still evolving.”
Of course, opinions differ on what the Fed will actually say, so the market's dollar view is hardly uniform either. According to Research Analyst Geoffrey Yu at UBS, “To simplify things, we believe that whatever the Fed will say, the key determination to make in identifying dollar's reaction function will be whether the market will be in a risk-on or risk-off mode ex-post. Bond yields and stock indices will move accordingly, accompanied by commensurate currency moves. As of June, the dollar is a 'positive risk-beta' currency, but its status is still evolving.”