DXY/ USD: LONG AUDUSD 0.78TP - FOMC DUDLEY SPEECH HIGHLIGHTSFed dudley was largely hawkish on the margin more than hintin that the Fed should hike this year using plural "rate hikes this year good news" and also saying "fed funds futures under-pricing the rate hike likelihood".
These remarks seem to be the catalyst for USD buying despite the weak CPI data (as expected) - nonetheless i think this is a good opp to add to AUD$ longs at 0.771 (at market) or lower (with 0.78tp) if possible as the remarks are likely to be faded later today once the real hard data (CPI miss) sets in, I dont think these remarks will firm USD for long.
Nonetheless as it stands the opt implied probability of a Sept/Dec hike from fed funds futures trades at 12% and 37.8% marginally up on the day from 9% and 37.4% though i expect this to fade throughout the day along with USD demand.
FOMC Dudley speech highlights:
Fed's Dudley: Sees 2H Economy Stronger Compared with 1H
Fed's Dudley: Economy in `OK Shape'; Income, Jobs Gains `Sturdy'
Fed's Dudley: Economy in `OK Shape'; Income, Jobs Gains `Sturdy'
Fed's Dudley: Premature to Talk About Raising Inflation Target
Fed's Dudley: US Election will not `Weigh' on Fed Decision on Rates
Fed's Dudley: Premature to Talk About Raising Inflation Target
Fed's Dudley: Near-Term Risk from Brexit has Diminished
FED'S DUDLEY: TOO EARLY TO TALK ABOUT RAISING INFLATION TARGET
FED'S DUDLEY: FED FUNDS FUTURES MKT UNDER-PRICING RATE HIKES
FED'S DUDLEY: RATE HIKES THIS YEAR WOULD BE 'GOOD NEWS'
FED'S DUDLEY: US ECONOMY TO BE BETTER IN H2 2016
FED'S DUDLEY: APPROACHING TIME FOR RATE HIKE
- Doesn't Expect 'A Lot Of Tightening Over Time'
- Says His Views Remain Generally Unchanged
