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1 Jan 1970
USD strength remains intact - Investec
FXStreet (Barcelona) - Jonathan Pryor, Corporate Treasury Analyst at Investec, remarks the firm tone from the USD post-Fed.
Key Quotes
"The USD continued to strengthen yesterday, following on from Fed Chair Yellen's signal of a potential first rate hike as early as six months after the end of their QE purchase program, which would point to Q2 2015, earlier than previously expected. EURUSD broke below 1.3800 while GBPUSD traded down into the 1.6400 area as broad dollar buying was the order of the day."
"Yesterday's data showed further strength in the US economy, with the Philadelphia Fed's March Manufacturing Activity index jumping to a reading of +9 from -6.3 in February to beat expectations and help US and European stocks recover from the Yellen driven sell off. Stocks continued to recover as the Fed announced the results of its annual big bank 'stress test' to assess the resilience of the financial system to another crisis."
"Unsurprisingly they found that the major banks would suffer substantial losses in such an event. Despite this only 1 out of the 30 banks tested in this scenario failed to meet the Fed’s standard of a 5% capital ratio equity to risk weighted assets, with all the household names passing."
Key Quotes
"The USD continued to strengthen yesterday, following on from Fed Chair Yellen's signal of a potential first rate hike as early as six months after the end of their QE purchase program, which would point to Q2 2015, earlier than previously expected. EURUSD broke below 1.3800 while GBPUSD traded down into the 1.6400 area as broad dollar buying was the order of the day."
"Yesterday's data showed further strength in the US economy, with the Philadelphia Fed's March Manufacturing Activity index jumping to a reading of +9 from -6.3 in February to beat expectations and help US and European stocks recover from the Yellen driven sell off. Stocks continued to recover as the Fed announced the results of its annual big bank 'stress test' to assess the resilience of the financial system to another crisis."
"Unsurprisingly they found that the major banks would suffer substantial losses in such an event. Despite this only 1 out of the 30 banks tested in this scenario failed to meet the Fed’s standard of a 5% capital ratio equity to risk weighted assets, with all the household names passing."