BUZZ-COMMENT-USD to get even stronger if Fed easing cycle is over
The U.S. dollar could go from strength to strength if a perception takes hold that the Federal Reserve's rate cutting cycle, which began with a 50 basis point reduction last September, might already be over.
Bank of America's "base case" following Friday's strong U.S. jobs data is for the Fed to keep interest rates on hold for an extended period, with the risks for the next move "skewed towards a hike".
If it looks like the Fed's next move will be to raise rather than cut rates, it would pour fuel on the dollar-bullish fire.
Markets currently price one Fed rate cut for this year, by December. 0#USDIRPR
The USD index scaled a fractionally fresh 26-month peak just shy of 110 on Monday, as the greenback continued to benefit from Friday's strong U.S. jobs data.
At least five Fed officials are due to speak this week, including Federal Reserve Bank of New York President John Williams on Wednesday.
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(Robert Howard is a Reuters market analyst. The views expressed are his own)
((robert.howard@thomsonreuters.com))
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