DXY upside likely limited to 100.00 – Westpac

Richard Franulovich, Chief Currency Strategist at Westpac, argued the potential upside in the greenback should appear somewhat capped around the 100.00 mark.

Key Quotes

“USD index should enjoy a short-lived rally on a Clinton victory but it’s not clear that it has the wherewithal to break above 100. The Fed’s intent is clear enough i.e. the case for a hike, “has continued to strengthen”, but problematically, a Dec hike is now amply priced in at 72%”.

“The Fed is in any case unlikely to deliver anything more than a very dovish hike while EZ surveys show growth momentum is improving. That, along with likely less ECB/BoJ asset purchases in 2017 should contain USD upside to no more than 100”.