Global easing to benefit USD - BTMU

FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, views that the US dollar is likely to strengthen even if the Fed delays rate hikes as overseas easing continues.

Key Quotes

“The latest economic data releases from the US are signaling a loss of growth momentum and building downside risks to inflation in the near-term which may help dampen US dollar upward momentum.”

“As a result investor expectations are building that the Fed will delay planned rate hikes until beyond the middle of this year.”

“The US economy is benefitting from a loosening in monetary conditions even as the Fed inches closer to raising rates and the US dollar strengthens.”

“The easing of monetary policy overseas is helping to lower interest rates in the US as well. The stimulus from lower US yields and energy prices may make the Fed more confident to begin gradually raising rates by reinforcing expectations that US economic growth will remain solid.”

“Even if the Fed delays raising rates until later this year, the US dollar will likely continue to strengthen supported by monetary easing overseas.”