In his weekly blog for FX-MM, Nordine Naam, Natixis’ senior forex analyst, discusses the currency market’s latest movements – with the news dominated by the Federal Reserve’s conflict on whether to hike the Fed Funds rate, or wait for further economic indicators before making a move.
For Naam, a rate hike seems unlikely in the short-term as it may be better used by year-end, given the raft of risks ahead, such as: Italy’s constitutional reform referendum in October; fears of equity market corrections and, above all; the US presidential election in November.
Elsewhere, sterling is enjoying a brief rebound following a sharp 1.5% month-on-month increase in July’s retail sales, when the consensus predicted a mere 0.1% rise. Naam urges investors that any post-referendum flurries for the pound will be temporary.
To read the full forecast, please click here.