"In line with market pricing, we expect the FOMC to raise the federal funds rate by 25bp.

From there, our US economists price a more sizeable tightening cycle than the market (see Exhibit 1), and we expect further USD strength as the market re-prices more tightening from the Fed.

That said, we also think that Chair Yellen will continue to emphasise that monetary policy is not on a pre-set course and that the data will dictate the future path of interest rates.

We expect the USD to continue to move higher and we forecast the TWI USD to appreciate about 7% versus G10 currencies over the next 12 months.

In mid-November, we went short Sterling and the Euro against the Dollar as one of our Top Trade for 2017".

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