19 Jun 2015
USD in a tight spot after a not so hawkish FOMC – OCBC
FXStreet (Barcelona) - Emmanuel Ng, FX Strategist at OCBC Bank, believes that in the short-term, the USD might face weakness from data outside of US versus other FX.
Key Quotes
“Risk appetite levels improved slightly post-FOMC with the FXSI (FX Sentiment Index) a touch softer within Risk-Neutral territory on Wednesday. Overall, markets may in the short term continue to digest the dovish tilt to the FOMC news flow (specifically the dot plots) from overnight with near term dollar prospects obviously dented. However, on balance, we think that the structural profile for a firmer dollar has not been significantly derailed.”
“With the Fed now being perceived as being slightly less hawkish, we think this would also afford a greater degree of dovish latitude for the other global central banks, keeping the global policy dichotomy intact.”
“Given the short term fragility of the dollar at this juncture, expect also any positive data surprises outside of the US sphere to continue to lend support to the other major currencies.”
Key Quotes
“Risk appetite levels improved slightly post-FOMC with the FXSI (FX Sentiment Index) a touch softer within Risk-Neutral territory on Wednesday. Overall, markets may in the short term continue to digest the dovish tilt to the FOMC news flow (specifically the dot plots) from overnight with near term dollar prospects obviously dented. However, on balance, we think that the structural profile for a firmer dollar has not been significantly derailed.”
“With the Fed now being perceived as being slightly less hawkish, we think this would also afford a greater degree of dovish latitude for the other global central banks, keeping the global policy dichotomy intact.”
“Given the short term fragility of the dollar at this juncture, expect also any positive data surprises outside of the US sphere to continue to lend support to the other major currencies.”