18 Sep 2013
Flash: A weaker dollar to come on FOMC? - BAML
FXstreet.com (London) - Research teams at Bank of America Merrill Lynch eye the FOMC coming up and expectations are as follows:
Key Quotes:
“All eyes will be on the FOMC decision today around 2pm EST. Our US Economics Team stand by its December tapering call given mixed data since the June FOMC meeting but acknowledge the risk of a token $10bn reduction in the asset purchase pace”.
“In such an event, the Team would expect the Fed to provide a market friendly tone, downgrading the growth forecast and decoupling tapering from the hiking decision”.
“Regarding the 2016 forecast, our US Economics Team is certainly less worried than the market in terms of the pace of hiking. In the scenario described by our US economists, we would observe a rally in US rates and a weaker USD vs EM, with the shape of the curve being a function of the strengthening of forward guidance relative to tapering”.
Key Quotes:
“All eyes will be on the FOMC decision today around 2pm EST. Our US Economics Team stand by its December tapering call given mixed data since the June FOMC meeting but acknowledge the risk of a token $10bn reduction in the asset purchase pace”.
“In such an event, the Team would expect the Fed to provide a market friendly tone, downgrading the growth forecast and decoupling tapering from the hiking decision”.
“Regarding the 2016 forecast, our US Economics Team is certainly less worried than the market in terms of the pace of hiking. In the scenario described by our US economists, we would observe a rally in US rates and a weaker USD vs EM, with the shape of the curve being a function of the strengthening of forward guidance relative to tapering”.