FOMC member John Williams did it again: he said that asset purchases could “ease” by the summer and finish by the end of the year.
Yet again, his words boost the dollar: EUR/USD is getting closer to 1.30 and USD/JPY has distanced itself from 100.
Williams also said he expects growth to stand at 2.5% this year and 3.25% in 2014. He put an emphasis on falling inflation as a risk that could trigger more bond buying. The economy needs to further improve in order to end the program.
Nevertheless, Williams set two dates: the summer for tapering QE and the end of the year for ending it. This is significant.
Until his previous taper talk in mid-May, Williams was undoubtedly considered a dove. His reiteration of hawkish words, this time in an even clearer manner, have an impact.
EUR/USD was already challenging the 1.3050 line earlier in the day, supported by better than expected PMIs. It is now trading at 1.3010.
USD/JPY was hit by another stock market fall in Japan and USD/JPY reached 100.02 before escaping this line. The comments help it keep a safe distance.