Steve Pearson
Steve Pearson
amount data dollar housing monetary negative reducing required slowing suggestive thus weakness
Any significant weakness in the housing data would be dollar negative suggestive of a slowing economy, thus reducing the amount of monetary tightening required from the Fed.
backdrop dollar impact knocked pause survey weaker
The impact of the weaker ISM survey has knocked the dollar lower. The backdrop for the dollar is that it's just consolidating around here. It's a pause for now.
assume dollar fall fed position raising start stops structural support trade transition wrong
It's wrong to assume that the dollar will start to fall as the Fed stops raising rates. What we could see is a transition to a structural support for the dollar as the trade position improves.
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Some of the risks associated with rate cuts have dissipated for sterling. We expect rates to remain on hold as the economic picture in the U.K. stabilizes.
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The story of 2005 was the dollar defying an overwhelmingly bearish consensus. The dollar has little to fear from a slowdown in U.S. consumption growth as this will eventually lead to an improved external trade position.
employment rates reminder report risks serves short strong upside
The strong US employment report serves as reminder that upside risks to US short rates linger.