20 Mar 2015
USD rally nearing its end - HSBC
FXStreet (Bali) - The HSBC Research Team believes the USD rally is nearing its end, with evidence mounting.
Key Quotes
This is in contrast to a market which appears determined to envisage ever greater upside for the currency. The USD has already rallied more than is typical historically, and many of the arguments currently being used to justify an extension are likely already in the price."
"Having been one of the early adopters of a bullish USD view back in 2013, we now see factors that make us believe we are at the beginning of the end: Recent data developments: US tolerance for USD strength has its limits. Valuations. Positioning / USD bullishness has become all-pervasive. USD does not perform once Fed has actually pulled the trigger. "
"There is obviously scope for one last spike higher, as is often the case in the later phase of big bear or bull market moves, which sucks all participants into the narrative. So convinced become the participants that any rational arguments fall on deaf ears and forecasters start coming out with ever more extreme views."
Key Quotes
This is in contrast to a market which appears determined to envisage ever greater upside for the currency. The USD has already rallied more than is typical historically, and many of the arguments currently being used to justify an extension are likely already in the price."
"Having been one of the early adopters of a bullish USD view back in 2013, we now see factors that make us believe we are at the beginning of the end: Recent data developments: US tolerance for USD strength has its limits. Valuations. Positioning / USD bullishness has become all-pervasive. USD does not perform once Fed has actually pulled the trigger. "
"There is obviously scope for one last spike higher, as is often the case in the later phase of big bear or bull market moves, which sucks all participants into the narrative. So convinced become the participants that any rational arguments fall on deaf ears and forecasters start coming out with ever more extreme views."