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USD: Upside Risk Into Next Week’s FOMC – MUFG

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What is the outlook for the USD in the near-term?

Here is their view, courtesy of eFXdata:

MUFG research discusses its expectations for next week’s FOMC policy meeting and sees a scope for further USD upside in the near-term.

“The BoC on Wednesday, the ECB yesterday and next week the Fed, the BoE and the BoJ will all meet and we suspect next week’s messages from central banks will be similar to what we got this week from the BoC and the ECB – that is that there remains a long road to recovery and hence caution over any removal of monetary accommodation is required. But it is the Fed that will perhaps have the most difficult job in communicating that message,” MUFG notes.

There is a greater risk we believe that Fed Chair Powell’s efforts to emphasise the Fed’s commitment to loose monetary policy is not as convincing which may see the US dollar advance further over the short-term,” MUFG adds.

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