USD index can make a run at 97.0 - Westpac

Richard Franulovich, Research Analyst at Westpac, notes that the June and July Fed hike odds sit at 34% and 54% respectively.

Key Quotes

“While our base case is for the Fed to take a pass at both meetings - Chair Yellen’s concerns about asymmetric policy risks and Brainard’s caution around global risks should sway the Board - those Fed hike odds are nevertheless apt to drift higher in coming days, not least because Fedspeak should continue to hammer home the message that June is a live option. June Fed hike odds can rise toward 40-45% before stabilising and the USD index can make a run at 97.0. But, would shift to the sidelines by mid-next week on risks of a contractionary ISM and soft payrolls.