FXStreet (Barcelona) – With the crucial FOMC meeting ahead, FX Strategists at TD Securities suggest paying attention to the Fed dots to measure if any change is seen in the implied rate hikes.
Key Quotes
“Last week ended with markets struggling to make sense of spot moves—EURUSD strengthening despite better US data and increasing concerns about Greece—that probably reflected liquidity and positioning rather than fundamentals. The news from the weekend was that talks between Greece and its creditors fell apart rather quickly so we may see some renewed pressure on the common currency.”
“But this week will be tricky for investors; the early part of the week is likely to be dominated by Greece and the wait for the FOMC on Wednesday which will be more than enough of a reason for investors to sit on their hands and save firepower for when prospects look a little clearer given the squeeze on returns in the past month or so.”
“We expect a cautiously optimistic Fed to do a lot of the spadework to prepare the markets for higher rates but there will also be a fair bit of focus on any shift in the dots which currently imply two hikes this year.”
(Market News Provided by FXstreet)