Forex Blog: Currency Trading News & Analysis.

October 5th 2005

Interest rate hike already priced into USD

A recent survey of money managers underscores increasing bearishness with regard to the USD, because of both technical and fundamental indicators. From a technical standpoint, trading in the USD-Euro currency pair has been increasingly range-bound, and traders feel an upside-Euro breakout is imminent. From a fundamental standpoint, the short-term USD outlook is tied interest rates, which are expected to either remain constant or rise. While rising interest rates would theoretically provide support for the USD, investors believe an increase has already been priced into the USD. Thus, if rates remain constant, the USD will likely decline. The Financial Times reports:

“Fed officials have been consistently sending out hawkish messages on monetary policy,” said Mansoor Mohi-uddin of UBS. “But for now, it appears as if the good news is being priced into the dollar.”

Read More: Dollar retreats with good news priced in

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Posted by Adam Kritzer | in Investing & Trading, US Dollar | No Comments »

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© 2004 - 2024 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.