How much for the Fed and what for the ECB? – Commerzbank

By FXStreet FXStreet (Córdoba) – In the coming week, discussion on the FX market will mainly again revolve around how the Fed and ECB are likely to proceed. According to Thu Lan Nguyen, analyst at Commerzbank, while in the USA, the focus will be on the inflation data, investors in the eurozone are likely to be hoping for signs from the central banks themselves.

Key Quotes

“Since the strong labour market report for October, the market has largely priced in a first interest rate hike by the Fed in December. As a result, USD appreciation has recently started to falter”.

“US data up to the December meeting would have to be hugely disappointing to trigger renewed market doubts about the lift-off. Rather, the focus is increasingly on the question of what will happen after that. FOMC members are not tiring of stressing that the key interest rate will be raised in this cycle at a much slower rate than in earlier cycles. Consequently, only two further rate hikes are being priced in by the market for 2016. Ultimately, the pace of rate hikes will largely depend on how the economic data turn out”.

“The figures due next week on the private consumer spending deflator …read more

Source:: FX Street