DOLLAR - TO BE OR NOT TO BE!

FED -  TO TAPER OR NOT TO TAPER?

FED policy is a critical part of the market at the moment. Without QE, indices have not reach these levels, financial actives have not rise at hystorical highs, but what will happen without artificial support of central bank? Could economy miraculously recover, would prices of financial actives keep the maximum levels? VERY LESS PROBABLE!
Dollar was smashed recently and the trend reversal could occur after one single event: Federal Reserve meeting

Why Federal Reserve meeting is crucial?
Ben Bernanke could announce the end of Quantitative Easing. Are just sepeculations? What indicates there is more than a fragile recover of american economy on the global recesion context? Recent market evolution show that any news about QE determines extreme volatility!
IT WIIL BE A DRAMATIC SEMNTIMENT CHANGE,when markets will find out that FED will not stop QE?

To Taper or not to Taper, this is the question Bernanke & Co. have to answer. In 2008 FED reduced interest rate to zero and adopted aditional measures like QE in order to stimulate investments and consume. Normalisation presumes three steps: taper QE, quit QE and incresase interest rate. Tapering QE is just one element.

What are the chances FED announce the begining of the first phase? Obiously, we must observe the last markets evolution and reactions to the important news. We see a light recover of the economy, but bad enough to eliminate speculations about a QE tampering. 

What are the scenarios? Knowing the conditions above, a step to normalisation will be a little surprising and could generate risk aversion, consolidating dollar. Less QE means less delution and improve growth perspectives. The key is the value: 5 billions is unimportant, over 10 billions would generate volatility, concluding the most expected scenario is that 

FED WILL NOT MOVE THIS TIME

THE EVENT WILL PROBABLY GENERATE A RISING RISK APPETITE AGAINST DOLLAR JUST FOR SHORT TERM