Dollar tends to show the 10th consecutive weekly gain against a basket of currencies, reflecting expectations that the Fed can “hint” to raise rates during the upcoming meeting, the survey showed analysts, currency traders and policy experts conducted CNBC.
However, more than a third of respondents believe that the currency is growing too quickly and rapidly, and there was risk of a correction, if the Fed does not confirm his statement that monetary tightening may start sooner than expected.
The dollar will be “fairly strong support in anticipation of meeting the FOMC (Federal Reserve Committee on Open Market), says Simon Gros-Hodge, head of investment consulting LGT Bank in Singapore,” however, I am convinced that the market overestimates the likelihood that the Fed take an aggressive tone. The dollar may finish the week well below the “amended its” overbought “status” – adds Gros Hodge, although in the medium term currency expects “significant growth.”
In particular, the dollar “bulls” will closely monitor the mention whether the Fed once again that rates will remain near zero “for quite some time.” Sean Callow, senior currency strategist at Westpac sure that it is likely that this remark does not happen again. “Otherwise, there will be a temporary setback,” – he says.
Even if the Fed will stick to the script and disappoint “bulls”, many policy experts believe that the dollar will not suffer serious damage. Index DXY «become too” overbought “in the short term, and probably will consolidate,” – says Hans Getty, head of the Asian investment arm of BIL. “However,” bullish “dollar market is still going on,” and DXY index tends to around 88, after breaking resistance at 84, adds Getty.
60% of survey participants CNBC (15 of 25) believe that this week the dollar will rise. More than a third – 36% (8 of 25) – predict that “green” will fall, and 4% (1 of 25) believe that he will be traded at the current levels.