Monday , March 1 2021

Could the dollar extend its downtrend after yesterday's FOMC?

Analysts at TD Securities explain that following comments from Fed Chairman Powell at yesterday's press conference, the FOMC has firmly focused on a more accommodative stance on both interest rates. and on the swing.

"As a result, we are now changing our expectations of reducing the size of the Fed's balance sheet to end in June, with a new rate hike this year (and this cycle) to 2.75% in September.

We expect an extension of the weakening dollar, but with the G3 countries also withdrawing from central banks in the political arena, differentiation will be essential. In fact, the euro remains in management conflict, leaving the yen as an "anti-dollar" by default and a haven for uncertain prospects. We expect the USD / JPY to move down, staying within range.

The "Powell Put", however, is firmly established, which should help to withstand risk conditions at the moment and allows us to seek AUD to tactically extend USD pair gains. "

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