Forex Flash: Growing US interest rates to run out of steam? – Westpac

“From a US perspective, talk around an early exit from QE seems premature, particularly with the unemployment rate failing to gain much traction to the downside in recent months. With our US data surprise index off its highs, we suspect the upward momentum in US interest rates will also run out of steam.” writes the Westpac Strategy Team.

For Europe we would argue a similar point. “There is still plenty of scope for sovereign debt/ growth concerns to re-emerge. The recent price action in some of the peripheral equity markets in Europe is testament to this. If such concerns re-emerge then Asia is still likely to be seen in a relatively positive light and leave capital well and truly entrenched in the region.” they add. Of course the flip side of this is that renewed concerns in Europe and slower US growth momentum could well cast a cloud over the global outlook.