Weaker Dollar more likely as Fed shifts its tone notably – MUFG
|The US Dollar is sharply weaker. FOMC shift in tone is set to undermine USD, economists at MUFG Bank report.
US banking sector substantially underperforming Europe
“The overall tone of both the statement following the expected 25 bps rate hike and the press conference by Fed Chair Powell was clearly more dovish.”
“The S&P Bank Index fell 5.6% yesterday. The sector in the US is clearly underperforming Europe which we believe will reinforce EUR/USD support.”
“The US Dollar low from early February is in sight and with banking sector confidence fragile once again we see high risks of that low for the Dollar being tested. It is really a matter of monitoring US banking sector stocks for now.”
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