As the expectation is growing that the US Fed may end the rate hike cycle as early as its March meeting, the dollar will become susceptible to any weak US data. |
Most people in the market see the BOJ scrapping the quantitative easing policy at its board meeting on April 28 as a done deal. |
The dollar has rebounded a bit, but the momentum is not necessarily strong. |
Unless the statement offers fresh indications that the US Fed will continue its rate hikes going forward, the current rebound will come to an end sooner rather than later. |
We believe that the US Fed will make its final rate hike in the current cycle at the Jan 31 FOMC meeting. |
With the US new home sales proving to be a positive surprise, traders who are still holding short dollar positions are likely to continue adjusting their positions this week. |
Yields rose to a level attractive for many investors and they should think about buying. |