26 Jan 2015
FOMC could support USD momentum – BofA-Merrill Lynch
FXStreet (Edinburgh) - Analysts at Bank of America-Merrill Lynch assessed the next FOMC meeting due on Wednesday.
Key Quotes
“A steady-state FOMC statement that maintains a “patient” stance of policy and does not add any dovish language should be supportive for the bullish USD trend seen since the last FOMC meeting”.
“At the same time, market-implied expectations have pushed out the first Fed hike to October (from June as of the last FOMC meeting), beyond the “mid-2015” suggested by several FOMC participants”.
“The US dollar has maintained a steady bid in recent weeks, but further confirmation that the Fed remains on course — despite overseas risks and growing disinflationary pressures — should support a further move higher, alongside the selloff in frontend rates mentioned above”.
“our expectation for healthy 3.5% growth for 2015, the unemployment rate dropping to the low 5% range, and some pickup in wages, all point to rate hikes sometime in 2015, and potentially by June if activity surprises to the upside and core inflation does not fall further”.
Key Quotes
“A steady-state FOMC statement that maintains a “patient” stance of policy and does not add any dovish language should be supportive for the bullish USD trend seen since the last FOMC meeting”.
“At the same time, market-implied expectations have pushed out the first Fed hike to October (from June as of the last FOMC meeting), beyond the “mid-2015” suggested by several FOMC participants”.
“The US dollar has maintained a steady bid in recent weeks, but further confirmation that the Fed remains on course — despite overseas risks and growing disinflationary pressures — should support a further move higher, alongside the selloff in frontend rates mentioned above”.
“our expectation for healthy 3.5% growth for 2015, the unemployment rate dropping to the low 5% range, and some pickup in wages, all point to rate hikes sometime in 2015, and potentially by June if activity surprises to the upside and core inflation does not fall further”.