17 Oct 2013
Flash: USD index to potentially test its Feb 2012 lows of 78.1 - Westpac
FXstreet.com (Barcelona) - After the deal to reopen the US government and raise the debt ceiling, Richard Franulovich, Strategist at Westpac, does not expect the USD to show much strength other than a short term relief rally.
Key Quotes
Most US economic data in coming weeks will be weak and corrupted due to the dysfunction in Washington. At a minimum the government shutdown and the uncertainty created by the impasse assure a weaker round of confidence surveys."
"A Yellen led Fed and a couple months of corrupted data warn that tapering may not be a serious chance until well into 2014, possibly Q2 at the absolute earliest."
"Even in the unlikely event that US labor market shows substantial improvement in early 2014 there is every chance the Fed may want to sit on the sidelines amid another potential round of Washington brinksmanship early in the new year, just as they did in September."
"There is potentially another Washington fight over funding the government and raising the debt ceiling early next year as well."
"We can see the USD index testing its Feb 2012 lows of 78.1, almost 3% lower than current levels. We struggle to see the USD much lower than that however, despite the aforementioned laundry list of negatives."
chart below.
Key Quotes
Most US economic data in coming weeks will be weak and corrupted due to the dysfunction in Washington. At a minimum the government shutdown and the uncertainty created by the impasse assure a weaker round of confidence surveys."
"A Yellen led Fed and a couple months of corrupted data warn that tapering may not be a serious chance until well into 2014, possibly Q2 at the absolute earliest."
"Even in the unlikely event that US labor market shows substantial improvement in early 2014 there is every chance the Fed may want to sit on the sidelines amid another potential round of Washington brinksmanship early in the new year, just as they did in September."
"There is potentially another Washington fight over funding the government and raising the debt ceiling early next year as well."
"We can see the USD index testing its Feb 2012 lows of 78.1, almost 3% lower than current levels. We struggle to see the USD much lower than that however, despite the aforementioned laundry list of negatives."
chart below.