3 Dec 2014
US dollar supported by less dovish than expected Fed rhetoric - BTMU
FXStreet (Barcelona) - According to Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, the USD has derived support from less dovish than expected rhetoric from the Fed officials who have failed to express any major concerns regarding lower commodity prices and falling inflation expectations.
Key Quotes
“The US dollar has continued to strengthen in the Asian trading session with the dollar index rising to within touching distance of the intra-day high from June 2010 at 88.70. A decisive break above resistance at 88.70 would open the door to further US dollar gains in the near-term potentially lifting the dollar index towards the 90.00-level by year-end.”
“The US dollar has derived support this week from less dovish than expected rhetoric from Fed officials who do not yet appear overly concerned by the increased downside risks to inflation from lower commodity prices and falling inflation expectations.”
“Fed officials have placed more emphasis on the positive impact for the US economy from lower commodity prices. Fed Vice Chairman Fischer also stated yesterday that the Fed is moving closer to softening their low rate commitment by making it even more dependent on incoming economic data.”
“If the Fed replaces their current commitment not to raise rates for a “considerable” time on the 17th December, it will likely at least initially be viewed as a clear signal that the Fed has taken another step closer to raising rates providing support for the US dollar.”
Key Quotes
“The US dollar has continued to strengthen in the Asian trading session with the dollar index rising to within touching distance of the intra-day high from June 2010 at 88.70. A decisive break above resistance at 88.70 would open the door to further US dollar gains in the near-term potentially lifting the dollar index towards the 90.00-level by year-end.”
“The US dollar has derived support this week from less dovish than expected rhetoric from Fed officials who do not yet appear overly concerned by the increased downside risks to inflation from lower commodity prices and falling inflation expectations.”
“Fed officials have placed more emphasis on the positive impact for the US economy from lower commodity prices. Fed Vice Chairman Fischer also stated yesterday that the Fed is moving closer to softening their low rate commitment by making it even more dependent on incoming economic data.”
“If the Fed replaces their current commitment not to raise rates for a “considerable” time on the 17th December, it will likely at least initially be viewed as a clear signal that the Fed has taken another step closer to raising rates providing support for the US dollar.”