USD: scope for a test of 100.00 – Westpac

Chief Currency Strategist at Westpac Richard Franulovich sees the possibility of the greenback to test the key barrier at 100.00.

Key Quotes

“The USD index has scope for gains toward 100 but further meaningful sustained strength beyond that will likely prove elusive. A mildly more upbeat sounding FOMC statement, the Fed noting that, “near-term risks to the economic outlook have diminished” has done nothing to boost Fed tightening expectations, understandable given the lack of explicit signals for September”.

“But even as Fedspeak is light through August, the handful of Fed appearances on the schedule (culminating with Chair Yellen’s at the KC Jackson Hole Conference) should nevertheless echo the sentiments of the FOMC statement, arguably nudging Fed hike expectations slightly higher”.

“But we wouldn’t get too carried away with USD upside. Our US data surprise index warns that most of the good news on the US activity front is now behind us”.