FXStreet (Edinburgh) – Strategists at TD Securities see the Fed hiking in September and the US dollar to gather further traction during H2.
Key Quotes
“US growth momentum has shifted higher. As the headwinds to growth abate, the economy i s expected to eke out a respectable 2.0% GDP advance this quarter. This will reflect a modest rebound from Q1’s weather-induced setback. The pick-up in momentum should persist into H2 as the economy transitions to a self-sustaining recovery”.
“We expect the data to improve sufficiently to provide the Fed with the confidence they need to raise rates this year. As such, we remain bearish on Treasuries and we continue to expect the curve to bear-flatten into the first rate hike i n September. And with two hikes pencilled in for this year, we look for 5s to close 2015 at 2.00%”.
“The USD should benefit from the rebound i n activity data a s the effects of a soft Q1 recede and investors focus on the looming Fed tightening cycle. We remain constructive on the USD. We look for a more pronounced gains over the second half of the year but concede these may fall a little short of our current forecast trajectory”.
(Market News Provided by FXstreet)