US Dollar: Oil-driven support as Fed seen hiking – ING
ING strategist Francesco Pesole notes the Dollar remains supported as ING now expects the Fed to deliver one final rate hike in December. Despite near-term upside risks for the Dollar, ING keeps a gradually negative longer-term view and anticipates lower energy prices in Q4.
ING strategist Francesco Pesole highlights the dollar's support from oil prices and anticipates the Federal Reserve to conduct one final rate hike in December. Pesole maintains a gradually negative outlook for the US dollar in the longer term and attributes the recent dip to oil developments and upcoming meetings between President Trump and Gulf and Chinese leaders.
Although the dollar experienced a slight decline on Friday following a speculated Bank of Japan rate check, it remains stable according to the report. Pesole and the team predict a higher likelihood of a December hike compared to October, driven by the proximity to midterm elections and potential data releases. If markets assess a two-thirds probability of a hike, the Fed might act preemptively to prevent curve volatility.
The team still expects near-term upside risks for the dollar but remains more dovish than the market. The upcoming meetings and oil price fluctuations will be the primary factors influencing the dollar's performance this week.
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