25 Feb 2015
Fed could hike in June, EUR/USD down to 1.10 in 6m – Danske Bank
FXStreet (Edinburgh) - Sverre Holbek, Senior Analyst at Danske Bank, expressed its views regarding a rate hike by the Fed and the prospects for the pair.
Key Quotes
“Relative monetary policy is back on the agenda in the global FX markets”.
“Although Yellen’s statement in her semi-annual testimony to Congress yesterday was quite neutral, we still expect that forward guidance will be changed in March in the sense that ‘patience’ will be removed from the FOMC statement”.
“We expect the first rate hike to arrive in June and still call for a broadly stronger USD over the coming 3-6 months”.
“In our view, the USD should strengthen as long as we are waiting for the first rate hike, particularly versus currencies that are backed by ultra-loose monetary policy, such as the EUR, JPY, CHF and SEK”.
“We forecast EUR/USD at 1.10 in 6M and expect USD/JPY to shoot higher to 125 in 6M”.
Key Quotes
“Relative monetary policy is back on the agenda in the global FX markets”.
“Although Yellen’s statement in her semi-annual testimony to Congress yesterday was quite neutral, we still expect that forward guidance will be changed in March in the sense that ‘patience’ will be removed from the FOMC statement”.
“We expect the first rate hike to arrive in June and still call for a broadly stronger USD over the coming 3-6 months”.
“In our view, the USD should strengthen as long as we are waiting for the first rate hike, particularly versus currencies that are backed by ultra-loose monetary policy, such as the EUR, JPY, CHF and SEK”.
“We forecast EUR/USD at 1.10 in 6M and expect USD/JPY to shoot higher to 125 in 6M”.