Two Fed rate cuts on the cards, but no shorting the USD – JP Morgan

Dhwani Mehta FXStreet

In the view of the analysts at JP Morgan, the US Federal Reserve (Fed) is likely to reduce the interest rates twice this year, but do not recommend going short on the US dollar.

Key Quotes:

“Looking for 2 Fed rate cuts in 2019, citing harmful impacts on business confidence caused by US trade war induced trade uncertainty.

Lower rates, so short the buck? No.

The corollary in the FX-space to a more challenged global growth environment should be a broadly stronger USD

Conclusion would not be fundamentally altered if the Fed did decide to take out insurance and cut rates since it would be doing so in a weakening, i.e. USD supportive, global environment.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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