USD to be the main beneficiary of a hawkish message from Powell – Crédit Agricole
Markets stay relatively quiet waiting for FOMC Chairman Jerome Powell to deliver his opening remarks at the annual Jackson Hole Symposium. A hawkish message should see the dollar strengthening, in the view of economists at Crédit Agricole CIB Research.
High bar for a hawkish surprise from Fed Chair Powell
“We continue to think that the recent price action is raising the bar for a hawkish surprise from the speech of Fed Chair Powell in particular. Indeed, the US rates market current pricing of policy tightening seems consistent with that signalled by the June Fed dot plot.”
“With many positives related to the Fed already in the price of the USD, we continue to think that the currency’s main support could be a potential further deterioration of risk sentiment. Indeed, should a hawkish message from Powell undermine global risk sentiment, the USD could be the main beneficiary.”
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FXStreet Insights Team
FXStreet
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