Daniel Katzive
Daniel Katzive
data dollar environment heading likely market prevent remain strong timing
Data has been strong enough heading into year-end to prevent market participants from making strong conclusions on the likely timing of the end of the Fed's tightening cycle, and in this environment the dollar is likely to remain well-supported for now.
action against assumed behavior break changed cover dollar dominate exclusion factors forced highs last level likely market near price week year
I think the break of the big level last week ... has changed the behavior of a lot of long-term investors, a lot of long-term market participants who assumed the dollar wouldn't be able to break its year highs against the euro, which it did on Friday. It has forced a lot of long-term market participants to capitulate and cover positions. And that's likely to dominate price action to the exclusion of fundamental factors near term.
begins coming data dollar economics likely renewed slow team
If US data begins to slow markedly in the coming weeks, as our US economics team suspects, the dollar is likely come under renewed pressure.
change definitive quarter second soon
We think it's really too soon to see a definitive change from the BOJ. It's more of a second quarter story.
adjustment dollar interest weakness week
There's more to the dollar weakness this week than just an adjustment in interest rates.
against below dollar michigan pull touch
Michigan was a touch below consensus. The dollar may pull back a little, especially against interest-rate-sensitive currencies.
beyond fully hike marked prospects remains
While a hike in May remains fully priced, prospects for tightening beyond that have been marked down.
data downside given market opposed rate remains sensitive sign surprises
I think this is a sign that the market remains disproportionately sensitive to downside surprises in U.S. data as opposed to the upside, given how much (Fed rate hikes) is already priced in.
continues cycle dollar economies exposed fed key leave policy second structural suspect
We suspect that the end of the Fed tightening cycle as policy tightening continues in the key low-yield economies will leave the dollar increasingly exposed to structural vulnerabilities in the second quarter.
average earnings fed growth headlines solid strength
Friday's solid US payrolls headlines and strength in average earnings growth have boosted Fed tightening expectations further.
activity against allowing easing euro evidence further housing market prompt retail rethink retreat risk solid stability
Further evidence of stability in the housing market and solid retail activity could prompt a rethink of MPC easing risk now priced in, allowing the euro to retreat sharply against the pound.
buy currency good short
Short term, it is good to buy the currency on dips.
amount currency downside fair fed remains surprises upside vulnerable
Moreover, with a fair amount of Fed tightening now priced in, the US currency remains more vulnerable to downside surprises than upside surprises.
continued dollar fed markets price reason staying strong
The reason the dollar is staying strong is because markets have continued to price in more Fed tightening.