USD on a back foot? – Danske Bank
|USD was on a back foot yet again due to a combination of US inflation figures coming out soft, thus questioning the Fed’s hiking pace, and Trump fuelling US isolation fears further by ousting Tillerson as foreign secretary, according to Chief Strategist, Valtteri Ahti at Danske Bank.
Key Quotes
“In the current environment, it seems there will be little relief for the USD, as this suggests the Fed cannot hurry on hikes and that (most) Trump actions are seen as a ‘liability’ for the USD. Today, focus is on EUR/USD on a wealth of ECB speakers: if the governing council members feel the QE move last week was taken wrongly by the market, there are plenty of opportunities to correct the market perception. However, given the apparent ‘success’ in an FX context for the ECB in delivering hawkish action wrapped dovishly, the need to do so should not be significant.”
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