Special Topic: Outlook of Feds Reduction to Quantitative Easing

In the monetary policy meeting the Fed announced the latest issue of the continued reduction in QE, and to abandon the policy interest rate forward-looking guidance. There was also a hint that they might raise interest rates ahead. The dollar index once again embarked on the cusp of the market.
From the point of view of yesterday’s Fed monetary policy decisions, the Fed continued to shrink QE 100 billion to $ 55 billion, and will abandon the original threshold of unemployment and inflation rates. The market was once considered a hawkish approach, even after the proposed reduction in QE was completed.
From the point of view of other monetary economies, Japan’s recent “Abe economics” was severely tested. Japan will increase in the near future consumption tax; while Britain maintains good momentum of domestic recovery. While the pound has a boost; eurozone recovery is slow, and the economic data is not ideal. Fear of the future remains under pressure. China benefited from the impact of structural reforms. Fear of the RMB exchange rate will continue to decline in the future. Australia will most likely raise interest rates however the date is unclear and the major emerging economies body are facing deflationary pressures. The vast majority of the global economy is conducive to the dollar currency index and the dollar index boost will come out ahead.
Since the financial crisis, the world’s major economies have begun a recovery state and the United States has become the most obvious. While the future of our other U.S. economic data is still to be seen, the U.S. economic recovery has been clear and the dollar index is a matter of boost.
Analyst Outlook:
In short, although the change factor greatly impacts the market, for now, the dollar index at a time of fear will be a strong performance. Unless there is strong recovery in the euro area as a whole, Japan’s “Abe economics” will have long-term stability and the major emerging economies can successfully get rid of deflationary pressures.

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