USD: Pre-emptive fall - AmpGFX

Greg Gibbs, Analyst at Amplifying Global FX Capital suggests that they might not expect an immediate turn around in the USD. However, it has been relatively pre-emptive in recent years in relation shifts in US monetary policy, he further adds.

Key Quotes

“It rallied sharply in the second half of 2014 into Q1 2015, anticipating rate hikes in the US that did not begin until December 2015.  It rallied to a peak in Dec/Jan 2016, pre-empting hikes this year in March and June.  It has fallen more rapidly in recent months, perhaps pre-empting a shift in focus to balance sheet reduction.”

“There are of course other factors that may account for a weaker USD this year (such as US political uncertainty & stronger economic growth abroad).  Nevertheless, the low rates outlook in the USA suggests that the weaker USD this year may have already built a relatively modest outlook for the US economy and slower moving Fed rates policy.”