18 Nov 2015
USD to maintain momentum as we head towards FOMC minutes - BNPP
FXStreet (Delhi) – Economists at BNP Paribas, expect the minutes to the FOMC’s October 27-28 meeting to reinforce market expectations for rate hikes to begin in December, even though the meeting preceded the very strong October employment report.
Key Quotes
“The USD’s strength this week has driven EURUSD to new H2 lows. The overall backdrop remains conducive to further broad USD upside in our view with EURUSD appearing on track to reach its year-lows around 1.05.”
“However, with ECB easing and Fed rate hikes likely to be increasingly fully priced by that point, there is scope for an on-the-fact rebound and we maintain our year-end target at 1.06.”
“Still, with December lift-off increasingly becoming market consensus, there may be more sensitivity to Fed indications going forward that USD strength could curtail the extent to which Fed hikes continue during 2016. In this regard, newly appointed Dallas Fed President Kaplan speaks on economic conditions Thursday and market participants will be keen to understand the extent to which this 2017 voter will echo the hawkish message of his predecessor.”
Key Quotes
“The USD’s strength this week has driven EURUSD to new H2 lows. The overall backdrop remains conducive to further broad USD upside in our view with EURUSD appearing on track to reach its year-lows around 1.05.”
“However, with ECB easing and Fed rate hikes likely to be increasingly fully priced by that point, there is scope for an on-the-fact rebound and we maintain our year-end target at 1.06.”
“Still, with December lift-off increasingly becoming market consensus, there may be more sensitivity to Fed indications going forward that USD strength could curtail the extent to which Fed hikes continue during 2016. In this regard, newly appointed Dallas Fed President Kaplan speaks on economic conditions Thursday and market participants will be keen to understand the extent to which this 2017 voter will echo the hawkish message of his predecessor.”