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USD: Lack of follow through strength in the Greenback - MUFG

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 9, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Delhi) - Derek Halpenny, European Head of GMR at MUFG, suggests that in the post-NFP dollar performance, there’s been a clear lack of follow-through with the dollar partially reversing some of Friday’s gains in trading today.

    Key Quotes

    “A rate increase is now about two-thirds priced with just over five weeks to go to the meeting on 16th December. There are numerous key data releases and of course the November jobs report on 4th December so the market’s willingness to price in fully the December move will be somewhat muted over the coming days, perhaps weeks. That might contain the performance of the dollar over the short-term.”

    “Of course it is worth remembering too that certain currencies have already fallen dramatically and from a valuation perspective might mean the fallout going forward is less than expected. The performance of the Brazilian real on Friday is certainly eye-catching in that regard.”

    “This week is another heavy week of Fed speaking engagements. Fed President Rosengen speaks today at 1700 GMT while Evans, Bullard, Yellen (opening remarks only) , Dudley, Fisher and Mester all speak this week. Rosengren today and Evans tomorrow and Thursday will perhaps be more interesting. There must surely be a strong possibility that Evans is now changing his thinking from his very dovish stance usually expressed publicly – indeed that would be consistent with his post-NFP interview with CNBC on Friday.”

    “We would expect the dollar to continue doing well but the scale of dollar strength last week and the unlikelihood that the markets will price in more of the December rate hike immediately may mean limited further gains for the dollar over the very short-term.”
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