The US Dollar holds on to Tuesday gains – BBH
The US Dollar (USD) is holding on to Tuesday gains triggered in part by hawkish comments from Federal Reserve (Fed) Governor Michelle Bowman, BBH Global Currency Strategy analysts note.
Fed comments give USD a lift
“Bowman warned ‘we are still not yet at the point where it is appropriate to lower the policy rate’, adding ‘I remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse.’”
“Meanwhile, Fed Governor Lisa Cook reminded market participants that ‘with significant progress on inflation and the labor market cooling gradually, at some point it will be appropriate to reduce the level of policy restriction. The timing of any such adjustment will depend on economic data and what they imply.’”
“The cyclical USD uptrend is intact. First, Fed policy continues to diverge with that of most other major central banks. Second, the favourable US macro backdrop justifies an upward reassessment in Fed funds rate expectations. Third, the June composite PMI prints show growth momentum favours the US economy.”
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FXStreet Insights Team
FXStreet
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