USD: Premature calls for a peak - Westpac
In view of Richard Franulovich, head of FX strategy at Westpac, calls for a peak in the USD’s multiyear run up are premature as the Fiscal-fueled US outperformance, aided by higher wages growth, likely extends well into 2019, producing another year of USD-supportive desynchronised global growth.
Key Quotes
“However, there's little on the near term event risk calendar to prompt a meaningful repricing of Fed expectations, now down to just one more hike in 2019 by mid-year.”
“If anything, the plunge in energy prices will take a bite out of US headline inflation prints (due next week) while the Dec 19 FOMC could see some of the more hawkish dots in the Fed’s projections ease back (around a likely unchanged median).”
“That likely keeps the USD defensive near term before medium term strength resumes in 2019. USD index weakness should not extend much beyond 94-95.”
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.
