The US presidential elections are very close and markets are scared of Trump. If Clinton wins, it’s not all roses for the greenback.
Here is their view, courtesy of eFXnews:
As widely expected, the Fed chose not to surprise markets and left policy unchanged. Regional Fed Presidents Mester and George continued to dissent in favor of a hike but Rosengren shifted back to vote with the majority. The changes to the statement were moderate but overall they gave the impression that the FOMC continues to inch closer to a December hike. The Committee noted that inflation had “increased somewhat” since earlier this year and said that the case for a rate increase had “continued to strengthen” while still judging the risks to the outlook as roughly balanced. This suggests that the data has so far probably met the bar for a December hike which remains our base case. While the Fed did not commit itself to a December move, this seems reasonable given the rising risk of post-election market volatility. As expected, the Fed announcement had little impact on the USD.
The USD has also been quite insensitive to economic news this week but this does not mean that data is irrelevant. If the US dollar were to stage a post-election relief rally, a strong data backdrop would likely encourage a more rapid rebuild of long-USD positions.
For lots more FX trades from major banks, sign up to eFXplus
By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.
Share
