Overall, this week in the currency markets is an exercise in reversing some of the post-NFP dollar strength. What would happen to the dollar if US rates peaked at 6%? Kit Juckes, chief currency strategist at Société Générale, he believes that this would be a support for the dollar.
a change of conversation
“The conversations I’ve had with clients have definitely turned to the possibility and implications of the Fed going well beyond the 5-5.25% high that everyone has been forecasting.”
“What would 6% do? Taking a look at Bloomberg’s survey of economists, there are quite a few banks who think we’ll be at 5.25% well into 2024, but no one has targeted a 5.5% top yet, let alone anything.” higher. The obvious answer is that a 5.5% spike, instead of 5.25%, means little, but 6% increases the risk of the cycle ending in disarray. And that would support the dollar and be bad for sensitive currencies to risk everywhere.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
