13 Feb 2015
Growing FX volatility to benefit USD – ING
FXStreet (Barcelona) - Chris Turner of ING, comments that the growing FX volatility due to monetary policy shocks by central banks will benefit the USD, and further expects EUR/USD to move towards 1.00 and USD/JPY to move towards 130 by 2015-end.
Key Quotes
“Foreign exchange markets are experiencing very high levels of volatility. Monetary policy shocks have largely been responsible for these, especially last month’s decision by the Swiss National Bank (SNB) to abandon its three-year floor in EUR/CHF.”
“Growing divergence in transatlantic monetary policy, plus immense uncertainty over Greece suggests volatility levels will remain high and leave the dollar as the prime beneficiary.”
“Not only is greater transparency emerging over ECB policy, but also on the timing of the Fed’s first hike. We now have greater confidence in our call for the move coming in June – with two further hikes seen by year-end.”
“After many false dawns, it now seems like we might see some real bearish flattening in the US yield. Certainly the forwards market is now pricing in such an outcome.”
“Higher real US interest rates should be broadly positive for the dollar.”
“By year-end, we think EUR/USD trades down to 1.00 and USD/JPY up to 130.”
Key Quotes
“Foreign exchange markets are experiencing very high levels of volatility. Monetary policy shocks have largely been responsible for these, especially last month’s decision by the Swiss National Bank (SNB) to abandon its three-year floor in EUR/CHF.”
“Growing divergence in transatlantic monetary policy, plus immense uncertainty over Greece suggests volatility levels will remain high and leave the dollar as the prime beneficiary.”
“Not only is greater transparency emerging over ECB policy, but also on the timing of the Fed’s first hike. We now have greater confidence in our call for the move coming in June – with two further hikes seen by year-end.”
“After many false dawns, it now seems like we might see some real bearish flattening in the US yield. Certainly the forwards market is now pricing in such an outcome.”
“Higher real US interest rates should be broadly positive for the dollar.”
“By year-end, we think EUR/USD trades down to 1.00 and USD/JPY up to 130.”