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26 Feb 2015
USD index may see a pullback to low 93s – Westpac
FXStreet (Barcelona) - Richard Franulovich of Westpac, expects USD Index to see a pullback to the low 93s with USD momentum slowing as a result of stabilising commodities and the dollar negative global data momentum.
Key Quotes
“Bullish USD momentum has come to a grinding halt, partly because the downdraft in commodities has abated and partly because of a USD negative shift in the global data momentum, with US data generally underwhelming (especially confidence gauges) while Eurozone and China data of late have not been as weak as feared.”
“We shift to a rare USD neutral outlook for the week ahead, though given data risks above. USD index may see a pullback to the low 93s.”
“However, we stick with a bullish bias for the month and quarter ahead - ECB sovereign QE is set to begin in March and as US experience with multiple rounds of asset purchases show, the USD was not materially rewarded during numerous bouts of stronger data amid QE, quite the opposite. Moreover, long term capital fl ow dynamics remain hostile to the euro.”
Key Quotes
“Bullish USD momentum has come to a grinding halt, partly because the downdraft in commodities has abated and partly because of a USD negative shift in the global data momentum, with US data generally underwhelming (especially confidence gauges) while Eurozone and China data of late have not been as weak as feared.”
“We shift to a rare USD neutral outlook for the week ahead, though given data risks above. USD index may see a pullback to the low 93s.”
“However, we stick with a bullish bias for the month and quarter ahead - ECB sovereign QE is set to begin in March and as US experience with multiple rounds of asset purchases show, the USD was not materially rewarded during numerous bouts of stronger data amid QE, quite the opposite. Moreover, long term capital fl ow dynamics remain hostile to the euro.”