Forex Flash: US surprise index model opens a short USD position - Westpac
FXstreet.com (Barcelona) - Soft US data releases this week have given Westpac US data surprise index to a selling signal on the US Dollar. The bank's model warns that most of the good US economy-related news are behind.
The model will open a short USD basket (vs EUR, JPY, GBP, CHF, CAD, NZD and AUD).
Westpac strategist Richard Franulovich, notes: "A run of weaker US data into the next FOMC will likely cement expectations for the Fed to roll its expiring $45bn Operation Twist program into an expanded program of outright asset purchases."
Richard argues that while further QE seems to be a done deal for most analysts, it is not fully priced into markets. "Weaker US data might focus attention on the prospects for a sharply expanded Fed asset purchase program, resulting in USD depreciation."
The model will open a short USD basket (vs EUR, JPY, GBP, CHF, CAD, NZD and AUD).
Westpac strategist Richard Franulovich, notes: "A run of weaker US data into the next FOMC will likely cement expectations for the Fed to roll its expiring $45bn Operation Twist program into an expanded program of outright asset purchases."
Richard argues that while further QE seems to be a done deal for most analysts, it is not fully priced into markets. "Weaker US data might focus attention on the prospects for a sharply expanded Fed asset purchase program, resulting in USD depreciation."
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