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23 Mar 2016
USD-bulls need to be more patient – Westpac
Strategists at Westpac see conditions for another leg higher in the greenback could not be ripe just yet.
Key Quotes
“Conditions still not yet propitious for a sustained USD bounce, patient USD bulls should eventually be rewarded”.
“Improving complexion to the data, including notably stronger leading indicators such as the regional PMIs offer a good starting point for the USD, but on its own won’t turn the tide”.
“Developments in March-June 2015 may provide a useful parallel. Back then a dovish March 2015 FOMC left the USD reeling through Q2 despite stronger data – not dissimilar circumstances to where the USD finds itself today - but by June 2015 steadily improving data led to a notable decline in Fed anxiety and a revival in tightening expectations, restoring the USD’s uptrend”.
“If that parallel holds the USD may find itself trading with a soft / consolidative tone (say 94-98 on DXY basis) for a few more weeks yet. Chair Yellen, ISM and payrolls on the docket next week”.
Key Quotes
“Conditions still not yet propitious for a sustained USD bounce, patient USD bulls should eventually be rewarded”.
“Improving complexion to the data, including notably stronger leading indicators such as the regional PMIs offer a good starting point for the USD, but on its own won’t turn the tide”.
“Developments in March-June 2015 may provide a useful parallel. Back then a dovish March 2015 FOMC left the USD reeling through Q2 despite stronger data – not dissimilar circumstances to where the USD finds itself today - but by June 2015 steadily improving data led to a notable decline in Fed anxiety and a revival in tightening expectations, restoring the USD’s uptrend”.
“If that parallel holds the USD may find itself trading with a soft / consolidative tone (say 94-98 on DXY basis) for a few more weeks yet. Chair Yellen, ISM and payrolls on the docket next week”.