Back
22 Jun 2015
Fed could still hike in September – Danske Bank
FXStreet (Edinburgh) - Analysts at Danske Bank still see the Federal Reserve hiking rates in September.
Key Quotes
“The past week showed more evidence of a US recovery in Q2. In fact the data suggests that it could be quite a strong rebound”.
“It is not unusual that when the pendulum swings too much in one direction it swings back fast once it moves in the other direction”.
“The cold weather and port strikes led to a Q1 that was “too weak” and we could see a swing back to a Q2 and/or Q3 that are “too strong”. This was the pattern we saw in 2014 when very cold weather led to a big slowdown in Q1”.
“While the Fed was more cautious than we expected at the meeting this week, we continue to look for a September hike based on more positive expectations for unemployment than the Fed has”.
“We also believe that the increased confidence the Fed clearly seeks before it hikes will be gained from the rebound we expect in the time up to the September meeting”.
“Stronger US data and a September hike from the Fed is also expected to eventually fuel renewed USD strength. We look for EUR/USD to move to 1.04 in 3M”.
Key Quotes
“The past week showed more evidence of a US recovery in Q2. In fact the data suggests that it could be quite a strong rebound”.
“It is not unusual that when the pendulum swings too much in one direction it swings back fast once it moves in the other direction”.
“The cold weather and port strikes led to a Q1 that was “too weak” and we could see a swing back to a Q2 and/or Q3 that are “too strong”. This was the pattern we saw in 2014 when very cold weather led to a big slowdown in Q1”.
“While the Fed was more cautious than we expected at the meeting this week, we continue to look for a September hike based on more positive expectations for unemployment than the Fed has”.
“We also believe that the increased confidence the Fed clearly seeks before it hikes will be gained from the rebound we expect in the time up to the September meeting”.
“Stronger US data and a September hike from the Fed is also expected to eventually fuel renewed USD strength. We look for EUR/USD to move to 1.04 in 3M”.