With a warning from US Federal Reserve banker Neel Kashkari that increasing interest could trigger a recession, dollar doves are alive and vocal. We believe they will prevail enough to block some additional hikes. We are seller of USD in the mid-run against high yielding emerging market and G10 currencies.
Last week meeting the Fed voted for a 0.25% hike and increased its 2018 real GDP forecast, reflecting the boost of tax reform. Yet the policy projections were left broadly unchanged.
By Peter Rosenstreich
