BNP Paribas: FOMC will support USD
Analysts at BNP Paribas think that the Fed will shift to a more hawkish direction and make more optimistic comments on the economy. They expect the Fed’s median forecast for the Fed funds rate to rise to 1.25% from 1.13% for end-2015 and to 2.75% from 2.50% for end-2016. At the same time, the specialists think that the Fed will stop short of altering the forward guidance and its reference to the considerable period between the end of QE and the start of rate hikes.
BNPP recommends buying USD on the dips and maintains a short position on EUR/USD from $1.2940 targeting $1.2500.