Back
30 Mar 2015
USD clings to the bullish outlook – BAML
FXStreet (Edinburgh) - The bullish stance around the greenback remains unchanged despite the recent sell off, suggested analysts at BAML.
Key Quotes
“The broad contours of our bullish USD views remain in place, despite the dollar selloff since the March Fed meeting”.
“The FOMC downgraded their growth, inflation and Fed Funds forecasts, but they still remain squarely in a data dependent stance leaving the potential for hikes from June”.
“Importantly for FX, the Fed added statement language that “export growth has weakened”, which combined with risks of a stronger dollar on inflation clearly suggests USD strength is on their radar”.
“But, in their mind US growth is strong enough to overcome these headwinds with the real trade-weighted USD index still below USD cycle highs. In the absence of forward guidance, data will dictate the dollar’s moves”.
Key Quotes
“The broad contours of our bullish USD views remain in place, despite the dollar selloff since the March Fed meeting”.
“The FOMC downgraded their growth, inflation and Fed Funds forecasts, but they still remain squarely in a data dependent stance leaving the potential for hikes from June”.
“Importantly for FX, the Fed added statement language that “export growth has weakened”, which combined with risks of a stronger dollar on inflation clearly suggests USD strength is on their radar”.
“But, in their mind US growth is strong enough to overcome these headwinds with the real trade-weighted USD index still below USD cycle highs. In the absence of forward guidance, data will dictate the dollar’s moves”.