7 Aug 2015
Fed’s lift-off in December, USD to remain strong – Rabobank
FXStreet (Edinburgh) - In the opinion of Jane Foley, Senior Currency Strategist at Rabobank, the greenback would surely keep the upbeat tone in the months ahead while the Fed could hike rates in December.
Key Quotes
“Irrespective of the exact timing of the first Fed tightening, it will come at a time when most other G10 central banks will still be maintaining a dovish bias”.
“Consequently, even though we do not expect the Fed to hike until December we remain broadly constructive on the outlook for the USD”.
“While a weak payrolls data today would be a setback for USD bulls, we expect that a widening in interest differentials between the ECB and the Fed next year will led EUR/USD lower in the coming months”.
“That said, since we view the EUR as a funding currency we expect the pace of downside pressure on the EUR only to increase when levels of risk appetite rise sufficiently to excite the carry trade”.
“In a 3 to 6 mth view we expect GBP/USD to edge lower on the expectation that the BoE will wait until next spring to hike rates”.
Key Quotes
“Irrespective of the exact timing of the first Fed tightening, it will come at a time when most other G10 central banks will still be maintaining a dovish bias”.
“Consequently, even though we do not expect the Fed to hike until December we remain broadly constructive on the outlook for the USD”.
“While a weak payrolls data today would be a setback for USD bulls, we expect that a widening in interest differentials between the ECB and the Fed next year will led EUR/USD lower in the coming months”.
“That said, since we view the EUR as a funding currency we expect the pace of downside pressure on the EUR only to increase when levels of risk appetite rise sufficiently to excite the carry trade”.
“In a 3 to 6 mth view we expect GBP/USD to edge lower on the expectation that the BoE will wait until next spring to hike rates”.