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20 Mar 2014
Markets digesting FOMC - Danske Bank
FXStreet (Barcelona) - Jens Nærvig Pedersen, Analyst at Danske Bank comments that FX markets will be focused on digesting the relatively hawkish Fed message from yesterday.
Key Quotes
“The FOMC certainly does not seem to be shaken by Q1 US data weakness nor by lingering China or geopolitical worries. And although Yellen tried to downplay the importance of the higher rate projections laid forth, it is now very likely that the US money market curve will be less well anchored going forward, which could eventually pave the way for more broad-based dollar strength.”
“We still think the lack of action from the ECB will be a headwind for EUR/USD to go much lower in the near term (after falling a big figure on the Fed meeting), but yesterday’s messages from Yellen highlight that monetary policy should be a dollar-supportive factor in H2.”
Key Quotes
“The FOMC certainly does not seem to be shaken by Q1 US data weakness nor by lingering China or geopolitical worries. And although Yellen tried to downplay the importance of the higher rate projections laid forth, it is now very likely that the US money market curve will be less well anchored going forward, which could eventually pave the way for more broad-based dollar strength.”
“We still think the lack of action from the ECB will be a headwind for EUR/USD to go much lower in the near term (after falling a big figure on the Fed meeting), but yesterday’s messages from Yellen highlight that monetary policy should be a dollar-supportive factor in H2.”