New York Fed President Bill Dudley is No. 3 at the Fed and used to be known as a dove. And when a dove turns hawkish, the dollar rises.
Dudley is very optimistic and confident about the US economy. He sees the Fed’s mandates of employment and inflation to be “in a good placeâ€. Growth is well-distributed and the US is getting close to full employment.
What about wages? These are consistent with productivity growth says. In this case, everything looks good and there is nothing to worry about. And, wage rises will quicken later down the road.
Dudley’s words follow the Fed’s hawkish hike. He basically echoes Yellen.
USD strengthens
In a week with few economic indicators, Fed speakers have the upper hand. The US dollar is gaining ground across the board.
For EUR/USD, the result is a new fall to the 1.116 handle. The pair had already traded above 1.12 but failed to hold its ground. Will it lose 1.1160 as well? Further support awaits at 1.11 and 1.1025. High resistance is at 1.1220.
More: USD Index: After A Bounce, A Deeper Wave ‘C’ Could Extend This Summer – BofAML
