In a few hours, after the Fed decision (all the updates), we will be in a different world.
And where will the dollar stand? The team at Credit Suisse explains:
Here is their view, courtesy of eFXnews:
For today’s FOMC decision, Credit Suisse US Economics team is forecasting a 25bp hike, but for the committee to convey a dovish tone in its guidance about the future path of policy.
“This view is widely held by the market – with 99 of 102 economists on Bloomberg forecasting a hike and the front-end rates market pricing a roughly 80% probability of such a move (assuming Fed Funds settles in the middle of its range),” CS adds.
“What does this mean for the FX space? “We retain a USD-bullish view given the fact that so little has been priced in for the Fed’s hiking cycle. We think this Fed hiking cycle will be different from those in decades past where the “liftoff” marked an end to broader USD strength. Instead, we see some key differences in the current macro backdrop that suggest broad-based USD strength can continue,” CS argues.
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