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7 Mar 2013
Forex Flash: Positive data not enough for Fed to end QE - Societe Generale
Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that US ADP data yesterday suggests US employment growth is maintaining a 1 ½% annual rate, which puts a floor under GDP growth.
At that rate, he feels that we should see the unemployment rate go on edging lower, hitting 6 ½% in about 2 years. However, he writes, “That’s not enough to get the Fed thinking about stopping QE or raising rates anytime soon, really, but the dollar is now being bought on growth, as opposed to benefiting only from its safe-haven status. I remain bullish of dollars through 2013. Today’s US calendar sees the trade balance and jobless claims, but US markets will be in
‘wait and see’ mode ahead of payroll data tomorrow.”
At that rate, he feels that we should see the unemployment rate go on edging lower, hitting 6 ½% in about 2 years. However, he writes, “That’s not enough to get the Fed thinking about stopping QE or raising rates anytime soon, really, but the dollar is now being bought on growth, as opposed to benefiting only from its safe-haven status. I remain bullish of dollars through 2013. Today’s US calendar sees the trade balance and jobless claims, but US markets will be in
‘wait and see’ mode ahead of payroll data tomorrow.”