Economists at Commerzbank discuss the USD outlook as market expectations regarding US key rates have moved upwards.

Market and FOMC largely agree in their projections of the future rate path

“For the first time market and FOMC largely agree in their projections of the future rate path. It was not the FOMC that moved but the market that shifted its rate expectations to the upside. All that is USD-positive.”

“We would consider the current USD strength to be sustainable if we agreed with the new view on the Fed. But we don’t. Our Fed watchers continue to expect no further rate hikes. And that is why we expect that the current USD strength is not sustainable.”