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USD: FOMC meet is the next big event risk - Westpac

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Delhi) – Richard Franulovich, Research Analyst at Westpac, suggests that the FOMC meeting is on Wed which is likely to impact the price action of the US currency.

    Key Quotes

    “Markets and economists are all expecting no change, reinforced by commentary from Fed officials in recent weeks. Ahead of GDP and the employment cost index next Fri we have existing home sales this Fri, consumer confidence and S&P/Case-Shiller house price index on Tue and new home sales Wed. The Dallas and Richmond Fed manufacturing surveys are also out.

    Bias: Event risk next week unlikely to help the USD much at all. The FOMC meeting is likely to be a placeholder and should still stress gradual normalisation, though the risk is that doubts around “global and financial market developments” may be reinserted into the statement and related to that downside inflation risk may be given greater prominence. That, and a probable sub-1% advance Q4 GDP, matching the Atlanta Fed nowcast, could see the USD trade on the back foot next week. Q4 employment cost index must print solidly above consensus to defuse these downside USD risks next week.”
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