- Analytics
- News and Tools
- Market News
- The Dollar will have to wait and see – Commerzbank
The Dollar will have to wait and see – Commerzbank
FX market’s reaction to today’s Fed meeting will not depend very much on the expected 25 bps rate hike but on everything else surrounding the meeting, Esther Reichelt, FX Analyst at Commerzbank, reports.
Expectations of rate cuts are likely to be pushed back further into the future
We have underlined often enough that 25 bps more or less make no difference for the valuation of the Dollar. In my view, the most important point is: due to this intensified form of data dependence the Fed is likely to control market expectations of imminent rate cuts, which in turn is likely to be relevant for the Dollar outlook.
It is quite possible that the Fed will maintain the terminal rate for some time before considering rate cuts. Until it is clear whether the rate hike cycle really is over, the expectations of rate cuts are also likely to be pushed back further into the future.
In the end, the prospect of rate cuts is likely to initiate the next episode of sustainable Dollar weakness in particular as our central bank experts expect that the ECB will keep its key rate at the terminal rate next year, contrary to market expectations. However, that will only become an issue over the coming months. Today the focus instead rests on the fact that it is simply too early to have this discussion. For now, the Dollar will have to wait and see.
See – Fed Preview: Banks see a 25 bps hike as “a done deal”, focus on forward guidance
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
