We See the Euro-Dollar Weakening From Here: UBS

The video discusses recent movements in the currency markets, focusing on the yen, euro, and sterling. It analyzes the FOMC statement, highlighting its continuity with previous guidance and its implications for GDP, employment, and inflation. The video also provides an outlook on asset allocation, emphasizing US equities and contrasting the policies of the Federal Reserve and ECB. Currency forecasts for the yen and euro against the US dollar are presented, along with the impact of a weaker yen on Japan's economy, particularly in terms of exports and imports.

What was the main takeaway from the recent FOMC statement?

• A significant change in monetary policy

• Continuation of previous guidance

• Immediate end to QE3

• Introduction of new economic measures

Why is the US dollar expected to strengthen against the euro?

• The Federal Reserve is easing its monetary policy

• The ECB is tightening its monetary policy

• Both central banks are easing their policies

• The ECB is easing while the Federal Reserve is considering tightening

What is a potential benefit of a weaker currency for an economy?

• Increased import costs

• Higher inflation

• Boost in exports

• Lower GDP growth

What challenge do Japanese corporates face despite a weaker yen?

• Lower production costs

• Higher domestic demand

• Stronger yen

• Increased competition from global competitors

What assumption must be made for a weaker yen to benefit Japan's economy?

• It will lead to higher prices for end buyers

• It will increase import costs

• Corporates can maintain their profit margins

• It will decrease export volumes