After the excellent retail sales report, the next test for the US dollar is the release of the meeting minutes from the Federal Reserve. What can we expect?
Here is their view, courtesy of eFXnews:
Barclays Capital Research expect the FOMC minutes from the July meeting on Wednesday to contain hints on the degree of concern that FOMC members have about the state of inflation pressures, as in the last statement the FOMC softened its description of the inflation incoming data.
“The FOMC has also indicated that it is ready to announce the beginning of balance sheet normalization.
As such, the minutes are likely to signal that the official announcement will come at the September FOMC meeting, as is our baseline,†Barclays adds.
On the USD front, Barclays expects some rebound late this year and early next year arguing that at current levels, long USD positions are beginning to look attractive from at least a tactical perspective.
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