25 Feb 2015
Yellen is no friend to the dollar – SG
FXStreet (Barcelona) - “It really is astonishing that Janet Yellen should be in charge of the Fed at a time of a dollar rally“, quotes Kit Juckes of Societe Generale, while commenting on Yellen’s testimony.
Key Quotes
“It really is astonishing that Janet Yellen should be in charge of the Fed at a time of a dollar rally. The Fed Chair has another chance to clarify the FOMC's policy stance, when she testifies to the House Financial Services Committee, but her message yesterday pretty clear.”
“The ‘patient' term may be dropped in March and a June hike is still on the cards, but it would not take much to make them delay the first hike, yet again.”
“Whatever the Fed does, they will not risk the economic recovery. That bias is why rates won't get anywhere near ‘neutral' before they peak.”
“The economic cycle will be brought down by asset bubbles bursting long before ‘tight' policy has any effect. Lessons were learned from the GFC, but not that one. This kind of message is hardly designed to push the dollar higher. It has been supported in 2015 by policy easing elsewhere and lower rates globally, rather than by any US news, but even so, the weight of long dollar positions is such that the correction can run further.”
Key Quotes
“It really is astonishing that Janet Yellen should be in charge of the Fed at a time of a dollar rally. The Fed Chair has another chance to clarify the FOMC's policy stance, when she testifies to the House Financial Services Committee, but her message yesterday pretty clear.”
“The ‘patient' term may be dropped in March and a June hike is still on the cards, but it would not take much to make them delay the first hike, yet again.”
“Whatever the Fed does, they will not risk the economic recovery. That bias is why rates won't get anywhere near ‘neutral' before they peak.”
“The economic cycle will be brought down by asset bubbles bursting long before ‘tight' policy has any effect. Lessons were learned from the GFC, but not that one. This kind of message is hardly designed to push the dollar higher. It has been supported in 2015 by policy easing elsewhere and lower rates globally, rather than by any US news, but even so, the weight of long dollar positions is such that the correction can run further.”