Fed: Hawkish hike to offer further support to the dollar – ING
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The dollar has retained good momentum so far this week. In the opinion of economists at ING, the Federal Reserve can keep offering support.
“We expect a 75 bps rate hike by the Fed, accompanied by a hawkish tone and Dot Plot projections which may show a terminal rate around 4.25-4.50%. We think this could keep risk sentiment fragile and offer further support to the dollar.”
“With the relationship between short-term rate dynamics and most G10 pairs having waned lately, expect a big chunk of the market reaction to be driven by the reaction in global equities – here a still hawkish Fed may not be read as good news, and that is another reason why we expect the safe-haven dollar to remain bid.”
See – Fed Preview: Forecasts from 16 major banks, fast pace hiking cycle continues
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