25 Jul 2013
Flash: USD near-term outlook – Westpac
FXstreet.com (New York) - Global Markets Strategist Sean Callow at Westpac analyzes the short-term outlook of the USD.
Key quotes
“A positive USD structural backdrop is still very much intact - notably the steadily improving US housing and labor market picture vs lingering recession in the Eurozone and persistent doubts about Chinese growth momentum.”
However, “the near-term picture is negative - the USD looks expensive vs an array of volatility indicators, Westpac’s US data surprise index is still rolling over, positioning by and large remains heavily long the USD, risks on advance Q2 GDP are on the downside and the FOMC statement is unlikely to make any references to tapering.”
“If anything the FOMC’s characterization of current conditions might note the spotty retail and housing data since their last meeting. Note next week’s meeting does not include a press conference. We adopt a negative week ahead bias for the USD.”
Key quotes
“A positive USD structural backdrop is still very much intact - notably the steadily improving US housing and labor market picture vs lingering recession in the Eurozone and persistent doubts about Chinese growth momentum.”
However, “the near-term picture is negative - the USD looks expensive vs an array of volatility indicators, Westpac’s US data surprise index is still rolling over, positioning by and large remains heavily long the USD, risks on advance Q2 GDP are on the downside and the FOMC statement is unlikely to make any references to tapering.”
“If anything the FOMC’s characterization of current conditions might note the spotty retail and housing data since their last meeting. Note next week’s meeting does not include a press conference. We adopt a negative week ahead bias for the USD.”