17 Mar 2015
EUR/USD parity further away then it currently seems - Rabobank
FXStreet (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank, expects the Fed to delay its rate hike until late in the year, which implies that EUR/USD parity might me further away than what markets currently expect.
Key Quotes
“US stock markets have been undermined by fears of a Fed rate hike this year and by a coincident slew of disappointing US data.”
“We argued yesterday that in recent weeks the market has had to digest signs of a drift lower in confidence data, a sharp fall in retail sales and a subdued pace of growth for wage inflation. Yesterday releases of US industrial production, manufacturing and housing data added to the lacklustre picture.”
“Since the start of this year the US economy has had to endure a 10% rise in the value of the USD index with corresponds to a significant tightening of monetary conditions.”
“In January US Treasury Secretary Lew stated that a strong USD was “good for America”, though many US corporates have made clear their discomfort. Perhaps in response to this Lew stated in February that the US “will push back hard” against countries that target weaker exchange rates to gain an unfair trade advantage.”
“While the US Treasury is in charge of USD policy, the Fed is the institution with the tools to guide the greenback.”
“We expect the Fed to delay a rate rise until late in the year and thus we expect that parity in EUR/USD may be further away then it currently seems.“
Key Quotes
“US stock markets have been undermined by fears of a Fed rate hike this year and by a coincident slew of disappointing US data.”
“We argued yesterday that in recent weeks the market has had to digest signs of a drift lower in confidence data, a sharp fall in retail sales and a subdued pace of growth for wage inflation. Yesterday releases of US industrial production, manufacturing and housing data added to the lacklustre picture.”
“Since the start of this year the US economy has had to endure a 10% rise in the value of the USD index with corresponds to a significant tightening of monetary conditions.”
“In January US Treasury Secretary Lew stated that a strong USD was “good for America”, though many US corporates have made clear their discomfort. Perhaps in response to this Lew stated in February that the US “will push back hard” against countries that target weaker exchange rates to gain an unfair trade advantage.”
“While the US Treasury is in charge of USD policy, the Fed is the institution with the tools to guide the greenback.”
“We expect the Fed to delay a rate rise until late in the year and thus we expect that parity in EUR/USD may be further away then it currently seems.“