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Ahead of the December 14 FOMC meeting, FX analysts expected the Fed to raise the funds rate from 0.50% to 0.75%, a move already priced in by markets. The note recommends buying two-week USD/ARS at-the-money calls and selling three- to six-month USD/ARS NDFs, citing expected Argentine agricultural export strength, tax amnesty inflows and Argentina's planned return to markets in Q1 2017.
It also notes the central bank held rates after a 200 bp cut in November.
Stronger seasonal grain and oilseed export receipts and capital inflows would add dollar supply in Argentina, supporting the peso against the dollar. Traders expect the Fed hike to be a limited move in FX, so Argentine export-driven currency strength is the main price channel for feed buyers sourcing Argentine product.
econotimes.comFxWirePro TeamDec 14, 2016Not enough comparable past events yet for a historical read.
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.
