As no central bank can match the pace of Fed’s hiking, short EUR/USD?
Overnight FOMC meeting shows that December hike is a lock, while those in 2019 remain wild cards.
- The Fed raised interest rates for a third time this year, and its forecast shows a strong consensus for a fourth hike in December, locking in a final hike absent some shock
- The ‘dot plot’ showed a wide range of views for 2019, with considerable support for two, three or even four hikes next year
- FOMC brushed aside any possible impact of trade disputes and tariffs, raising its GDP forecast for next year
- EUR/USD short remains attractive amid the monetary policy divergence between the two countries
Fullerton Markets Research Team
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