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19 Mar 2014
Flash: USD continues to weaken ahead of FOMC - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, notes the greenback is extending its softer tone.
Key Quotes
"The US dollar continues to weaken modestly in the Asian trading session ahead of today’s FOMC meeting. The Fed is expected to continue tapering QE by a further USD10 billion despite recent US economic weakness in early 2014."
"With inflation pressures in the US still subdued as evident in yesterday’s CPI report for February which revealed that both headline and core inflation increased by only 0.1%M/M, the Fed is likely to reiterate that monetary policy will normalize only gradually".
"The market’s main focus will be upon whether the Fed decides to update its forward guidance framework which currently states that it will likely be appropriate to maintain the current target range for the fed funds rate “well past” the time that the unemployment rate declines below 6.5%. The implied yields on the Fed fund futures contracts for December 2015 and 2016 have both already declined by around 20 and 30 basis points respectively since January which is weighing modestly upon the US dollar."
Key Quotes
"The US dollar continues to weaken modestly in the Asian trading session ahead of today’s FOMC meeting. The Fed is expected to continue tapering QE by a further USD10 billion despite recent US economic weakness in early 2014."
"With inflation pressures in the US still subdued as evident in yesterday’s CPI report for February which revealed that both headline and core inflation increased by only 0.1%M/M, the Fed is likely to reiterate that monetary policy will normalize only gradually".
"The market’s main focus will be upon whether the Fed decides to update its forward guidance framework which currently states that it will likely be appropriate to maintain the current target range for the fed funds rate “well past” the time that the unemployment rate declines below 6.5%. The implied yields on the Fed fund futures contracts for December 2015 and 2016 have both already declined by around 20 and 30 basis points respectively since January which is weighing modestly upon the US dollar."