Look for dollar gains on less-dovish Fed – Morgan Stanley

News

Morgan Stanley on next week’s FOMC decision

The Federal Reserve won’t be dovish enough to meet market expectations, Morgan Stanley warns.

“On the whole, the FOMC materials are likely to be insufficiently dovish to meet the market’s lofty expectations,” a report today said. “USD is likely to outperform on the day, particularly against risk-sensitive currencies like high-yielding EM FX and the dollar bloc.”

They expect a 25bps cut from the Fed but believe the dot won’t show any more cuts this year and that there might not be a clear signal into 2020.

Eventually, they believe dollar strength will reverse as the strong USD leads to negative implications for the economy and the Fed cuts more aggressively.

ForexLive

Products You May Like

Articles You May Like

Trade Optimism and Easy Money Set to Drive Stocks to Fresh Record Highs
Gold climbs $12 but it’s a small rebound after four days of declines
Netflix and Disney Shares Fall After Apple Unveils $4.99 Streaming Service
USD Price Pressure Remains After Upbeat Data Prints; Markets Await FOMC
Saudi Aramco’s full return to normal oil production volumes reportedly ‘may take months’

Leave a Reply

Your email address will not be published. Required fields are marked *