Flash: USD resilient pending macro slippage – BMO Capital Markets

FXstreet.com (New York) - The initial headlines contained within the June FOMC Minutes were not nearly as firm regarding QE tapering details or timing as we had expected them to be, but we are disposed to view the liquidity and positioning elements of moves in the overnight hours as very outsized relative this latest set of new information, notes Stephen Gallo, at BMO Capital Markets.

According to Gallo, “We therefore still look for a very resilient USD in this environment unless we are faced with significant slippage in US macro economic data, and so we will attach a fairly high degree of importance to this afternoon’s US claims data for the USD.”

Still, “we get the sense from the price action in the USD earlier today that market participants are toying with the question of whether or not the timeline for QE tapering may have been pushed back by the Fed beyond September or year-end, but confidence in that view one way or another seems very low.” Gallo adds.