USD Upside Appears Limited – Westpac
Richard Franulovich, Strategist at Westpac, sees the upside momentum in the greenback waning ahead of the June FOMC meeting.
“June and July FOMC hike odds of 24% and 51% respectively should be a ceiling for the time being, certainly the data does not seem like it will cooperate with the Fed”.
“40k in striking Verizon workers threatens to produce an underwhelming May payrolls”.
“Chair Yellen of course will have the fi nal say June 6. To the extent she offers any clarity over the timing of the next rate move we suspect July 27 odds will firm while June 15 odds could wane”.
“On balance the USD should not be upended too much one way or the other, though, with July Fed hike probabilities already north of 50% the fuel for another leg up in the USD next week might be lacking, those odds unlikely to rise much more with that meeting still seven weeks away”.