Heading into the Federal Reserve meeting there was already a very high bar set for a hawkish policy meeting. In the event the Fed kept to the script. They hiked by 50 bps, indicated further 50 bps rate hikes were to come, and also think the neutral rate is going to be at around 2.40% by year end. So, with rates currently at 0.875% there is another 150 bps worth of rate hikes to come between now and the year end. This was all expected.
A high bar was set
Heading into the meeting we were expecting a ‘buy the rumour, sell the fact response’ and this is what the initial reaction was. The start in QT was based on a phased approach with the Fed expected to take 3 months to bring the level up to $60 bln in treasures and $35 bln in Mortgage Backed Securities. On top o f this dovish development Jerome Powell ruler out a 75 bps rate hike, so this all meant the Fed were unable to surprise markets with a more hawkish response, so there was an initial move lower in the USD. See the reaction here:
Fading USD weakness
However, the USD weakness was not sustained post the FOMC. The strength in the USD is also partly due to the slowing global trade situation. As a global reserve currency the USD tends to gain when global growth slows. So, the recent concerns over slowdowns in China’s growth has also been a bullish pressure for the USD. This week we have some important inflation data out for the US. The US inflation rate is forecast to fall to 8.1% y/y down from the prior reading of 8.5%. Any signs of ‘peak inflation’ takes pressure off the Fed to hike rates and can result in some USD selling. This could boost the EURUSD this week as the ECB are increasingly making calls for a July rate hike. On the other hand if inflation comes back in high then expect more USD strength.
Your point of view caught my eye and was very interesting. Thanks. I have a question for you.
I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.
purchase amoxil without prescription – order amoxil pill amoxicillin order
buy diflucan 100mg online – https://gpdifluca.com/# buy fluconazole paypal
order cenforce 100mg for sale – https://cenforcers.com/# cenforce 100mg cheap
e20 pill cialis – tadalafil generic headache nausea cialis with dapoxetine 60mg
cialis male enhancement – https://strongtadafl.com/# no prescription cialis
I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.
ranitidine price – https://aranitidine.com/ zantac 150mg uk
100 viagra pills – on this site viagra buy london
Good blog you procure here.. It’s intricate to assign great quality script like yours these days. I truly respect individuals like you! Go through vigilance!! amoxil uso
This website exceedingly has all of the low-down and facts I needed to this subject and didn’t positive who to ask. https://buyfastonl.com/
The depth in this ruined is exceptional. https://ursxdol.com/get-cialis-professional/
I couldn’t weather commenting. Profoundly written! https://prohnrg.com/product/diltiazem-online/
This is the kind of criticism I positively appreciate. https://aranitidine.com/fr/cialis-super-active/
I’ll certainly return to be familiar with more. https://ondactone.com/simvastatin/
The vividness in this piece is exceptional.
flomax order online
This is the kind of writing I in fact appreciate. http://www.dbgjjs.com/home.php?mod=space&uid=531850