DXY seen gathering traction – Westpac

By FXStreet Strategist at Westpac Richard Franulovich has assessed the likeliness of further appreciation of the greenback in the next weeks.

Key Quotes

“Conditions slowly becoming propitious once again for a decent multi-day USD bounce”.

“Five Fed speakers have now explicitly noted that a case can be made for a 27
April Fed move – Harker, Lacker, Williams, Lockhart and Bullard, yet only 4bp of a hike is priced in, terribly low even allowing for the fact that Bullard is the only voter among the group”.

“Improving complexion to the data, including notably stronger leading indicators such as the regional PMIs, offer a good starting point for the USD. Yet more improved data releases next week including a probable 50+ ISM update and another 200k+ payrolls should see the case for 27 April Fed hike build”.

“Failing that, we wouldn’t get too discouraged. Developments in March-June 2015 offer interesting parallels”.

“A dovish March 2015 FOMC left the USD reeling through Q2 despite stronger data – not dissimilar circumstances to where the USD finds itself today. But by June 2015, steadily improving data led to a notable decline in Fed anxiety and a revival in tightening expectations, restoring the USD’s uptrend”.
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Source:: FX Street