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24 Feb 2015
EUR/USD might retest 1.1285 on an upbeat tone of Yellen’s speech – TDS
FXStreet (Barcelona) - Shaun Osborne, Chief FX Strategist at TD Securities, comments on the probable impact on the USD and EUR from hawkish or dovish scenarios of Yellen’s speech.
Key Quotes
“We think that Yellen will articulate an upbeat tone relative to what the January minutes presented last week, a view that we think will be consistent with policy lift-off in the latter half of 2015.”
“US yields edged lower yesterday, taking some of the anticipation of a relatively (to the minutes) hawkish bias out of the market perhaps. That means the USD has room to improve somewhat in the short run on a positive message.”
“Risks around the speech are perhaps somewhat asymmetrical though—a dovish-sounding set of comments which echo the ‘low for longer’ message from the January minutes would likely hurt the USD more than it can benefit from positive comments at this moment.”
“EURUSD may be able to retest the recent lows near 1.1285 if Chair Yellen sticks to the script that we expect but a quick-ish move back to the mid 1.14s (or more) might greet message that soft-pedals rate prospects.”
Key Quotes
“We think that Yellen will articulate an upbeat tone relative to what the January minutes presented last week, a view that we think will be consistent with policy lift-off in the latter half of 2015.”
“US yields edged lower yesterday, taking some of the anticipation of a relatively (to the minutes) hawkish bias out of the market perhaps. That means the USD has room to improve somewhat in the short run on a positive message.”
“Risks around the speech are perhaps somewhat asymmetrical though—a dovish-sounding set of comments which echo the ‘low for longer’ message from the January minutes would likely hurt the USD more than it can benefit from positive comments at this moment.”
“EURUSD may be able to retest the recent lows near 1.1285 if Chair Yellen sticks to the script that we expect but a quick-ish move back to the mid 1.14s (or more) might greet message that soft-pedals rate prospects.”