US dollar’s upside appears limited despite a hawkish Fed outcome – JP Morgan

Dhwani Mehta FXStreet

Analysts at JP Morgan offer their take on the first US Federal Reserve (Fed) policy meeting of 2022 and its likely impact on the US dollar.

Key quotes

"We do not expect fireworks from the Fed on Wednesday. It is possible that the Fed chooses to conclude QE early, though even if they do, the ultimate impact on US yields could be relatively muted given that a March hike is already fully priced and that UST valuations have closed much of the valuation gap that had persisted through late-2021.”

"This may limit the extent of tactical upside for the dollar against low-yielders even with a hawkish outcome.”

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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