US Dollar: Warsh tactics cloud Fed path – Commerzbank
Commerzbank’s Antje Praefcke discusses how new Fed Chair Warsh may be relying on markets to tighten financing conditions instead of raising rates, leaving the Dollar exposed to data-driven volatility.
Commerzbank's Antje Praefcke discusses potential risks associated with the new Fed Chair, Jerome Warsh, who may rely on market forces to tighten financing conditions rather than raising interest rates. This approach could expose the US Dollar to data-driven volatility and weaken its value. Praefcke highlights concerns about the Fed's credibility, as the inflation target has not been met for five years, and an interest rate hike has yet to occur despite sufficient reasons.
She warns that a weaker currency may lead to higher import prices, increasing price risks. Warsh's cautious and verbally hawkish stance may not support the Dollar in the medium term, leaving the central banker out of the president's line of fire. The article also mentions that first-tier data such as Friday's non-farm payrolls could cause more movement in the USD, while uncertainty surrounding US-Iran talks has driven traders toward the US Dollar as a safe-haven currency.
The Euro remains cautious ahead of a potential European Central Bank rate hike at the next meeting, while gold seesaws between gains and losses amid uncertainty over the Middle East crisis.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
