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ING reported that the Fed's more hawkish projections, including about 50bp of tightening expected in 2023, disrupted calm markets and lifted the dollar across G10 currencies. Markets began to expect that quantitative easing tapering could start earlier and conclude faster.
Expectations of earlier Fed tightening and tapering support the dollar, which weighs on dollar-priced commodities and can reduce foreign buying of US feed exports.
think.ing.comChris Turner, Francesco PesoleJun 17, 2021After 2,356 past bullish macro events, DXY moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% over 20.
After 533 past bearish macro events, EURUSD moved a median -0.3% over 5 sessions (33% higher; middle half -1.2% to +0.2%), and -0.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
ING notes the Fed's hawkish projections (about 50bp of tightening in 2023) lifted the dollar across G10, directly driving EUR/USD lower on 17 June.
ING describes the hawkish Fed projections lifting the dollar across G10 currencies, which matches the broad dollar gain.
