Inflation forces the Bank of Canada s hand ahead of Fed and ECB bnnbloomberg.ca - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from bnnbloomberg.ca Daily Mail and Mail on Sunday newspapers.
by Tyler Durden
Wednesday, Apr 14, 2021 - 10:20 PM
By Steve Englander, head of Global G10 FX Research and North America Macro Strategy at Standard Chartered Bank
Suppose inflation surprised and nobody cared
March CPI surprised well to the upside: yields and the USD fell
The FOMC (lack of) reaction function has credibility, in our view
The broad USD drop reflects growing conviction that yields will lag activity and inflation
Investors increasingly convinced of Fed inflation tolerance
March CPI inflation came in like a lion and went out like a lamb, all in a day. The 0.34% m/m print on core inflation is the highest since 2006, other than July and August 2020, which were the bounce back from anomalously low readings during the height of the COVID-19 shutdowns
By Paul J. Davies The dollar has slipped this month as the Federal Reserve stuck to its message that it won t raise interest rates soon despite forecasts that the U.S. economy will recover faster than its peers. The greenback is down more than 1% against the currencies of its biggest trading partners so far in April. Before a slight rise Friday morning, the dollar had seen its worst seven-day losing streak since December. The fall in the greenback interrupts a rally so far this year: The ICE Dollar Index climbed about 4% from early January to the end of March. The dollar s weakness is unlikely to last because the U.S. economy is expected to outpace others, according to Oliver Brennan, head of research at TS Lombard in London.
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BENGALURU (Reuters) - The U.S. dollar will remain strong for at least another month, according to a Reuters poll of foreign exchange strategists, who still forecast that the currency will weaken in the longer term.
FILE PHOTO: U.S. dollar notes are seen in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration
Following a spike in benchmark Treasury yields, which touched a 14-month high on Tuesday, the greenback is up about 3.5% this year, a solid revival given it started the year on the defensive.
Trillions of dollars in expected government infrastructure spending and a robust U.S. economic recovery will likely keep bond yields rising and the dollar well-supported in the near-term, forcing reassessments of bets against the currency.
U S dollar to remain strong for at least another month: Reuters poll wsau.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from wsau.com Daily Mail and Mail on Sunday newspapers.