Goldman Sachs on what to expect at the FOMC and how it will impact EUR/USD
A Goldman Sachs preview of the March Federal Reserve Federal Open Market Committee (FOMC) meeting, and how it will impact on EUR/USD
Just a quick one ...
The September and December FOMC meetings, which both weakened forward guidance, saw the Dollar rally by between 2% and 3% in subsequent weeks
We see this week's FOMC meeting, which should drop the word "patient", as another step in that process
Indeed, given that US monetary policy may revert to full data dependence, something that Chair Yellen alluded to in her Humphrey-Hawkins testimony with "meeting-by-meeting decision making", we think past price action is likely a lower bound
The normalization if US monetary policy is a powerful - if underappreciated - force for EUR/$ lower looking ahead
Lots of central bank activity coming up this week:
- Deutsche Bank FOMC preview: "Could ... remove patience ... policy normalization"
- CIBC preview of the FOMC this week: Federal Reserve "will drop" patience
FOMC Preview - The word according to Barclays, and that word will not be "patience"
- Bank of Japan preview
- Bank of Japan meeting comes right before key wage negotiations
- SNB - Everyone's favourite central bank also have a meeting this week .... what to expect