Fxstreet (Delhi) – Yann Quelenn, Market Analyst at Swissquote notes that the U.S is not on a clear recovery path even after several years of quantitative easing and is way too sensitive for the kind of regional turmoil happening in China.
“No rate hike will happen in September and we remain bearish on the dollar and think that the outlook is likely to change from a rate hike to a new quantitative easing, the Analyst adds.”
Key Quotes
“After the Central Banker’s meeting at Jackson-Hole last week, comments from the Fed’s officials were closely watched by traders. The Fed indicated that neither stock market volatility nor China’s turmoil has changed their outlook on the U.S. Economy and that they were still seeing improvement in the U.S job market.”
“Furthermore, the Fed confirmed that rates will be hiked when there will be reasonable confidence that the inflation rate will rise again to 2%.”
“Last week, the most important topic was not the Fed claiming that their U.S. monetary policy is in full control of economic stability. It was more about China dumping U.S. Treasury Bonds, which has been done since the debasement of the Chinese currency. And last but not least U.S. needs to buy back its own treasury bonds. QE4 may be of a good help.”
“No rate hike will happen in September and we remain bearish on the dollar and think that the outlook is likely to change from a rate hike to a new quantitative easing, the Analyst adds.”
(Market News Provided by FXstreet)