17 Dec 2014
Credit Suisse: USD likely to have a directional reaction to the FOMC statement - eFXnews
FXStreet (Barcelona) - The eFXnews Team notes Credit Suisse feels that USD is likely to have a very directional reaction to the FOMC statement, and expects Fed to replace “considerable time” with something that preserves flexibility in the rate hike timing.
Key Quotes
“We expect “considerable time” to be deleted as soon as the December 16-17 FOMC meeting but replaced with language that preserves flexibility on the timing of the first rate hike. The Committee will also have the recent market tumult to consider as it weighs adjustments to its language, with global jitters and year-end illiquidity potentially giving reason for a more dovish calculation. The market will also have its eyes on how the Committee describes inflation given the decline in oil and drop in market-based inflation expectations.”
“We think the USD is likely to have a very directional reaction to the FOMC statement. A removal of the “considerable amount of time” phrase would likely be supportive for the USD, and vice versa.”
Key Quotes
“We expect “considerable time” to be deleted as soon as the December 16-17 FOMC meeting but replaced with language that preserves flexibility on the timing of the first rate hike. The Committee will also have the recent market tumult to consider as it weighs adjustments to its language, with global jitters and year-end illiquidity potentially giving reason for a more dovish calculation. The market will also have its eyes on how the Committee describes inflation given the decline in oil and drop in market-based inflation expectations.”
“We think the USD is likely to have a very directional reaction to the FOMC statement. A removal of the “considerable amount of time” phrase would likely be supportive for the USD, and vice versa.”