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11 Feb 2014
Flash: Stay cautious on the US dollar near-term - Nomura
FXStreet (Bali) - The US Dollar may enter a period of weakness short term, notes Jens Nordvig, FX Strategist at Nomura.
Key Quotes
"The weaker US data, increased uncertainty about the outlook for US monetary policy, a high bar in terms of US growth expectations for 2014, and more stable risk markets, are all factors that could weight on the dollar in the near-term. In addition, the almost 10% rise in crude oil prices since the low in January (based on WTI) bears watching given the dollar‟s historically negative correlation to oil dynamics."
"We don't expect a clear impulse from Yellen in the near-term, but we worry that the data picture could remain soft and that 2014 growth expectations will be subject to downward revisions as the inventory drag continues to affect Q1. In this context, the retail sales data on Thursday are a fairly important given the various question marks currently out there, and our projection is on the low side of consensus."
"These considerations do not impact our structural views on the dollar for the year 2014 that much. But we are looking to stay more cautious on the dollar in the near-term and we are staying flat for now"
Key Quotes
"The weaker US data, increased uncertainty about the outlook for US monetary policy, a high bar in terms of US growth expectations for 2014, and more stable risk markets, are all factors that could weight on the dollar in the near-term. In addition, the almost 10% rise in crude oil prices since the low in January (based on WTI) bears watching given the dollar‟s historically negative correlation to oil dynamics."
"We don't expect a clear impulse from Yellen in the near-term, but we worry that the data picture could remain soft and that 2014 growth expectations will be subject to downward revisions as the inventory drag continues to affect Q1. In this context, the retail sales data on Thursday are a fairly important given the various question marks currently out there, and our projection is on the low side of consensus."
"These considerations do not impact our structural views on the dollar for the year 2014 that much. But we are looking to stay more cautious on the dollar in the near-term and we are staying flat for now"