The Fed language was upbeat and doesn't sound inclined to cut rates.
Joumanna
Parisha
We changed our Fed call overnight and no longer expect any more cuts this year. The Fed delivered a more upbeat message with newfound optimism on the labor market.
Could the next Fed chair influence this policy outlook?
Joumanna
Parisha
The Fed will continue to make policy based on economic data and retain credibility, but markets can price in risk.
Who is selling the USD and why has the move been so dramatic?
Joumanna
Parisha
It's a broad-based mix of investors, reinforced by real money accounts hedging US asset exposure as euro-dollar breaks above 120.
What is the path for dollar-yen and can intervention be successful?
Joumanna
Parisha
Intervention can cause a sharp move lower, but fiscal concerns in Japan will persist, leading us to prefer expressing a weaker yen view via long euro-yen.
Is the strong euro near 120 a problem for the Eurozone economy?
Joumanna
Parisha
No. The euro can continue to strengthen. Improving European data justifies pricing in more term premium and better growth/inflation expectations.