Hawkish Fed to keep dollar afloat into the summer – ING
|The dollar is consolidating after yesterday's well-flagged 75 bps hike from the Federal Reserve. As the Fed wants policy rates in the 3.00/3.50% region by year-end, economists at ING expect the USD to trade near the highs this summer.
Dollar to remain bid on dips
“Powell said he wants the policy rate at 3.00-3.50% by year-end and the Fed dots tell us that the policy rate could be closer to 4.00% by the end of 2023. With inflation proving sticky this summer, there seems no reason for the Fed to back away from this hawkish messaging over coming months. That should keep the dollar supported on dips.”
“An additional factor favouring some dollar consolidation could be the temporary support to be found by equity markets into the end of June – as buy-side portfolio managers re-balance portfolios into equities.”
“For today, some softer US housing starts could drag the dollar a little lower, but a hawkish Fed should keep it bid on dips.”
“DXY should find support around the 104.50/60 area.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.