The big event of the month is already looming above our heads: the Fed decision of September 17th. To raise or not to raise the rates?
The team at Goldman Sachs doesn’t see it coming now and explains what it means for the US dollar.
Here is their view, courtesy of eFXnews:
“With an all-important FOMC meeting coming up next week, focus on the USD factor may increase once again. That has not typically been helpful for EM FX in recent years.
But given our US Economics team’s view that the first hike is not likely to come until December and given the very sharp sell-off in EM FX in recent days, some stabilisation is certainly possible in the event of a dovish outcome.
This would argue for some near-term caution in chasing the rapid moves of recent days. However, such a reprieve is likely to prove temporary, in our view, because the underlying external and internal adjustments are not complete, and we continue to see room for EM FX weakness versus the USD to extend in the medium term,â€
Aleksandar Timcenko, Kamakshya Trivedi – Goldman Sachs
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