Dudley talked about a compelling case for raising rates. Williams said that rates are “abnormally low”. And now, a permanent voter at the FOMC, Governor Lael Brainard, also adds her voice in talking about a rate hike becoming likely appropriately soon.
Brainard is a known dove. Back in September, there was speculation that an unscheduled speech by dovish Brainard would serve to provide a hint about a hike that month. That hype proved unfounded. She did not provide any kind of smoking gun, the dollar dropped and the Fed refrained from raising rates.
Similar to Dudley, No. 3 at the Fed, Brainard is a permanent voter and a dove. And similar to Dudley, she has shifted to the hawkish side. It seems that Fed officials are now aligned in one chorus, dropping very thick hints about the March meeting.
USD extends gains
- The greenback is gaining ground across the board. USD/JPY is up nearly 50 pips and trades at 114.80.
- EUR/USD, which enjoys higher inflation and hopes for a market-friendly outcome in France, is down only 20 pips, and sits at support around 1.0520.
- GBP/USD extends its falls and reaches 1.2270. The Brexit Bill complications also weigh.
- USD/CAD is around 1.3360, getting closer to resistance at 1.3380.
- AUD/USD backs off from 0.77 and despite outperforming some of its peers, looks weak against the greenback.
- NZD/USD is around 0.7130, at the lower end of recent trading ranges.
More: EUR/USD Parity Call In Place; USD: March FOMC Hike Looking More Likely now – BTMU
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