Forex: EUR/USD testing Monday’s highs, around 1.3380

In looking at individual monetary policy, especially localized to the G5, the actual influences on exchange rates recently – on an absolute level – have not exactly been clear-cut. According to Research Analyst Gareth Berry at UBS, “There is no firm relationship between outright balance sheet expansion and currency strength or weakness. Japan and Switzerland have actively expanded their balance sheets with little success of escaping disinflation/deflation (until recently), while every instance of the ECB purporting to 'do the right thing' via balance sheet expansion has also been greeted with the market returning to bidding the euro.”