FXStreet (Barcelona) – The eFXnews Team notes Barclays sees the FOMC statement along with the US data ahead to support USD ahead.
Key Quotes
“Markets will pay close attention to the tone of the FOMC statement on Wednesday and watch for hints on the timing of the first rate hike. Given the recent pickup in US consumption and labor market data, we think the Fed is likely to maintain its view that the winter slowdown was transitory and that the economy is likely to expand at a moderate pace. Indeed, the pace of job growth has picked up, with payrolls rising 280K in May, and the Fed’s LMCI has increased since the April meeting.”
“Additionally, we expect the Fed to reiterate that inflation will gradually rise toward the 2% target in the medium term as the labor market continues to improve and inflation expectations remain stable. Indeed, CPI data on Thursday, along with the latest import price data, should support our view that downward pressures on domestic core inflation from the lagged effects of USD appreciation will begin to wane going into the third quarter.”
“As such, we continue to think the Fed is on track to hike twice this year (at the September and December meetings).”
“Overall, we believe that the FOMC statements, along with CPI and other macro data, should support the USD.”
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