USD in the midst of a low intensity grind higher - Westpac

Sandeep Kanihama FXStreet Contributor

DXY in the midst of a low intensity grind higher that could yet see it test 99-100 but hard to get excited beyond that, according to Richard Franulovich, Research Analyst at Westpac.

Key Quotes

“The plunge in oil could see headline inflation rates tumble toward 0.0% on a six-month annualised basis in coming months. That will bleed into core rates as it always does and make it difficult for the Fed to sustain an overtly hawkish stance.”

“Republicans and their agenda will be buoyed victories in recent Congressional special elections but members appear no closer to a consensus on tax cuts, tax reforms or infrastructure.”

“Fed officials are hinting at a 20 Sep announcement for when balance sheet normalisation could begin but it is the dog that won’t bark. Fed Treasury holding maturities run well below the maximum run-off $30bn cap in all but seven months through 2019/2020, implying a glacial rundown in the Fed’s balance sheet.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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