Dollar Reaction to Taper Talk Disappoints

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Aug. 26 (Bloomberg) –- UBS Currency Strategist Beat Siegenthaler discusses the taper and when it will be reflected in the dollar. He speaks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)

September hurry up when does it really such reflected that?

I think it has been reflected already and the places we have been looking for.

I guess emerging markets that is where the action has been and where the impact of all of the tapering and expectation has been a driving.

The euro and sterling and some of the other earned sees where people have been disappointed.

Interesting you mentioned emerging markets because jackson hole of the weekend we had rebuffing calls of taking and the threat of fallout in emerging markets from the fed tapering.

Does that mean it will see more volatility and emerging-market current sees?

I think so, yes.

There has been years of these markets and of risk in general benefiting from the liquidity injections not only in the u.s. but elsewhere.

This will have to be -- and i do not inc.

It is the -- think it is a short-term issue that a longer-term issue.

There may be weeks and months where we kind of can recover a little bit curry it we had a little bit in may and it looked better and now we have a second one.

Tapering has not even started yet.

It will be a reoccurring theme for the next few months or so.

Let's talk about the emerging markets.

They are taking measures to insulate their currencies and economies in brazil announcing $60 billion in a program.

To increase firm -- foreign currency.

Will we hear more from the emerging markets see -- emerging markets central banks?

I would think so.

The defense there is few negative things are coming together.

These countries have had maybe 10 years are so -- or so of amazing development and very good returned from investors.

There's been a certain policy complacence creeping and that could be expected when things are going quite well.

Now we have this with j-roll -- with j-roll -- withdrawal of liquidity which means the environment is getting a lot more difficult.

There's also skepticism about for example currency intervention can really change anything from short term putting volatility a little bit down.

In the medium term and to be more fundamental.

We have the story on bloomberg.

An exclusive.

Talking about how these asian nations will prop up their currencies.

Many of these asian currencies have been diverse a fight biting the euros.

Is that why the result of the depletion of the foreign reserve?

-- many of these asian currencies have been diverse affiant -- diversifying by buying euros.

As we may be in the process of that.

It will probably be -- it will go down in terms of gdp.

It is less clear if it will be sold rather than not to accumulated further.

I do not think for the euro that is necessarily they are going to sell euros because -- and this is still seen as one of the major regions and if you want to reduce risk, that is not the first place you look especially since things a europe seems to have been stabilizing.

This text has been automatically generated. It may not be 100% accurate.

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