All eyes on Powell with USD risks to the upside – MUFG

FXStreet Insights Team FXStreet

Today the focus is very much on Fed Chair Powell who will speak on the economy and labour market. Economists at MUFG Bank note that risks are tilted to the upside for the US Dollar.

Powell in focus

“We fully expect comments that are consistent with previous comments – more needs to be done, inflation risks remain to the upside and the terminal rate will be higher than implied by the dots in September.”

“Key for the US Dollar and rates will be whether Powell’s comments are enough to alter notably the expectations for the terminal rate. That level is currently at about 5.00% and the risks in our view firmly lie to the potential for a shift higher that would provide a further catalyst for the reversal of the recent period of USD selling.”

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FXStreet Insights Team

FXStreet

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