5 May 2014
FOMC can maintan its USD negative bias - Societe Generale
FXStreet (Guatemala) - Kit Juckes, Global Head of Currency Strategy at Societe Generale notes recent events that allow the FOMC to maintain its dollar negativity bias.
Key Quotes
"The US 1yr rate in 5 years' time has been stuck in a very narrow range since last summer, but after Friday's employment report it is making a serious test of the BOTTOM of that range. The data were solid enough with employment increasing at a slightly faster rate and the unemployment rate continuing to trend lower."
"But the further drop in wage growth will provide even more ammunition for the FOMC to maintain its volatility-sapping and dollar-negative policy bias. The DXY dollar index has followed the US 5X1yr rate faithfully of late and is in dire danger of breaking lower."
Key Quotes
"The US 1yr rate in 5 years' time has been stuck in a very narrow range since last summer, but after Friday's employment report it is making a serious test of the BOTTOM of that range. The data were solid enough with employment increasing at a slightly faster rate and the unemployment rate continuing to trend lower."
"But the further drop in wage growth will provide even more ammunition for the FOMC to maintain its volatility-sapping and dollar-negative policy bias. The DXY dollar index has followed the US 5X1yr rate faithfully of late and is in dire danger of breaking lower."