8 Jun 2015
EUR/USD at 1.06, Fed’s lift-off in December – Rabobank
FXStreet (Edinburgh) - In the view of Senior Currency Strategist at Rabobank Jane Foley, the Fed could hike in December while the pair could grind lower to the 1.06 area.
Key Quotes
“Last week the IMF warned the Fed not to hike rates in 2015 and to be mindful of the consequences for the rest of the world of policy tightening”.
“While Fed Chair Yellen has previously acknowledged that the Fed does have a responsibly to consider the impact of its policy actions outside its borders, it primary mandate is based on US inflation and employment”.
“Friday’s US labour data included an uptick in wage data and suggests an improved environment for both”.
“However, an ‘early’ rate hike could lead to a surge in the value of the USD which could quash the delicate improvement in the US inflation outlook”.
“In our view the Fed will delay a rate hike to December and we expect that this will allow EUR/USD to fall at a moderate pace towards 1.06 on a 6 mth view”.
Key Quotes
“Last week the IMF warned the Fed not to hike rates in 2015 and to be mindful of the consequences for the rest of the world of policy tightening”.
“While Fed Chair Yellen has previously acknowledged that the Fed does have a responsibly to consider the impact of its policy actions outside its borders, it primary mandate is based on US inflation and employment”.
“Friday’s US labour data included an uptick in wage data and suggests an improved environment for both”.
“However, an ‘early’ rate hike could lead to a surge in the value of the USD which could quash the delicate improvement in the US inflation outlook”.
“In our view the Fed will delay a rate hike to December and we expect that this will allow EUR/USD to fall at a moderate pace towards 1.06 on a 6 mth view”.