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2 Mar 2015
Strong risk of a benign US inflation data, could impact USD strength – Rabobank
FXStreet (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank, views that there is a strong risk for a benign US inflation data, which could undermine the USD, while a stronger US data would push the EUR/USD pair lower.
Key Quotes
“Not only will the next few weeks bring a little clarity on the impact on the EUR of the ECB’s QE plan but investors also have the March 18 FOMC to look forward to.”
“In last month’s semi annual testimony, Chair Yellen reinforced the view that the Fed’s policy actions will be data dependent. As it stands there is speculation of sufficient improvement for the Fed to remove the term ‘patient’ from its statement in reference to the timing of the first hike.”
“Today, the market is expecting the releases of US personal income and spending data along with the PCE deflator. Stronger US data have the potential to feed on the EUR’s current vulnerability and push EUR/USD lower.”
“That said, there is a strong risk of benign inflation data. In our view, soft price pressures suggest the Fed is unlikely to hike rates before year-end and this could undermine the USD. Support is at the recent low near EUR/USD1.1160.
Key Quotes
“Not only will the next few weeks bring a little clarity on the impact on the EUR of the ECB’s QE plan but investors also have the March 18 FOMC to look forward to.”
“In last month’s semi annual testimony, Chair Yellen reinforced the view that the Fed’s policy actions will be data dependent. As it stands there is speculation of sufficient improvement for the Fed to remove the term ‘patient’ from its statement in reference to the timing of the first hike.”
“Today, the market is expecting the releases of US personal income and spending data along with the PCE deflator. Stronger US data have the potential to feed on the EUR’s current vulnerability and push EUR/USD lower.”
“That said, there is a strong risk of benign inflation data. In our view, soft price pressures suggest the Fed is unlikely to hike rates before year-end and this could undermine the USD. Support is at the recent low near EUR/USD1.1160.