Talking Points:
• The Fed maintained its course towards its first rate hike in years and further diverges from other CBs
• While the yield outlook will keep the Dollar on a solid footing, it has already gained serious premium
• Speculative appetite may prove the next major untapped well for the Greenback, but its impact has layers
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Against a sea of dovish sentiment and policy shifts, the Fed has taken the unusual step of keeping its course towards its first rate hike since 2006. The contrast this effort presents will keep the currency buoyant against most counterparts - especially those tending a very accommodative policy like the ECB - but how much of this theme is priced in? A hike 'sometime in the future' does not offer firm ground for bulls. Extending the climb on this fundamental catalyst with the same gusto as the past six months will require an increasingly aggressive lean. That will be difficult as global growth weighs on US expansion and the country's corporations broadly revise down their forecasts due to the currency. The next, progressive trend for the Dollar may need to come from another highly-capable source: risk trends. What big themes should we watch for the USD ahead, that's the topic of today's Strategy Video.
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