A public holiday today Stateside provides welcome relieft for the Greenback. The USD has been confirmed as the worst performing G10 currency in the first 6 months of the year according to Rabobank and is threatening to continue its poor performance into the back end of 2017.
Prima facie, one may place the blame on the Dollar decline solely with President Trump however looking at the hard data the economy simply hasn’t picked up as much as intially expected.
Central to this is the now increased market scepticism as to weather the Fed willl be able to announce a third rate hike by the end of the year.
Reversal out of long USD positions is also a function of an improvement in European fundamentals [i.e. political risk] which have driven money back accross the Atlantic. This has seen EUR trade to its highest since May 2016 against the Dollar and is predicted to end the year at 1.1700.
A revised 2024 The Dollar opens stronger this morning following the Federal Reserve’s decision last night. The decision confirmed interest rates were to stay on hold following this meeting. As we have highlighted following previous decisions, the forward guidance offered by the Chair Jay Powell was once again underwhelming. However, the Dollar’s bid this morning […]
Dot dot dot With the Federal Reserve’s interest rate decision looming large tomorrow, there is a significant risk that the Fed will fail to communicate sufficiently. Recently Powell and his fellow US rate setters have been reluctant to commit verbally to how they see the outlook for near term interest rates. Simultaneously, they have also […]
Fuel for the fire An upside inflation miss in the United States has certainly not helped allay many developing nations’ concerns about a strong US Dollar. CPI inflation registered in the United States at 3.7% for the month of August. That compares with a 3.2% July figure which was clearly much closer to the Fed’s […]