30 Apr 2015
Fed could hike in September, EUR/USD to trend lower – Danske Bank
FXStreet (Edinburgh) - Pernille Nielsen, Senior Analyst at Danske Bank, sees the Fed hiking in September and the pair resuming its leg lower in the medium term.
Key Quotes
“The USD recovered a little after the FOMC announcement last night as the statement did not provide much new information”.
“In our view, the statement is consistent with an FOMC that remains on track to hike rates this year”.
“We expect that the current weakness in US data is a soft patch in the economy and expect growth to pick up during the year and we still expect the Fed to hike in September”.
“The first hike from the Fed is now fully priced in December this year but the path of hikes over the following two years remains extremely subdued. Hence, we continue to expect that EUR/USD will fall over the coming 3-6 months on relative monetary policy expectations”.
“Historically, the USD tends to strengthen during periods when the Fed stops easing and until it starts to tighten. We see no reason why it should be different this time, particularly as we expect the ECB to continue its quantitative easing programme until at least September 2016”.
Key Quotes
“The USD recovered a little after the FOMC announcement last night as the statement did not provide much new information”.
“In our view, the statement is consistent with an FOMC that remains on track to hike rates this year”.
“We expect that the current weakness in US data is a soft patch in the economy and expect growth to pick up during the year and we still expect the Fed to hike in September”.
“The first hike from the Fed is now fully priced in December this year but the path of hikes over the following two years remains extremely subdued. Hence, we continue to expect that EUR/USD will fall over the coming 3-6 months on relative monetary policy expectations”.
“Historically, the USD tends to strengthen during periods when the Fed stops easing and until it starts to tighten. We see no reason why it should be different this time, particularly as we expect the ECB to continue its quantitative easing programme until at least September 2016”.