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Mark McCormick, North American head of FX strategy at TD Securities, notes that the broad USD is mixed, which reflects the back-and-forth on the G20 and Powell’s pick and roll.

Key Quotes

“The shift in Fed language has invited the market to interpret the outlook to match their biases. Hawkish or dovish aside, the key for the FX market is positioning, which has probably priced in hopes of moving into restrictive territory after the October speech.”

“Instead of a policy shift the backdrop rests on the narrative, as the Fed has walked back some language on the terminal rate. Pricing for 2019 has probably moved too far in the dovish camp, though FX is happy to follow the 10y back to 3%. The recent USD squeeze does little to alter the recent ranges with EURUSD probably around 1.1450 while USDJPY remains a fade ahead of 114.”