Westpac benefits from dollar resilience
Geoff Kendrick, senior currency strategist at Westpac in London, said the bank had long argued that the Federal Reserve Bank pause – seen in August – would not be a catalyst for a sharp greenback drop.
“Instead it provided just a one-off adjustment lower in terms of the dollar’s trading range,” Kendrick told FX Week.
“The reason for this is that yield differentials tend to impact currencies via long lags. Hence a sharp dollar sell-off would have required a more meaningful compression in yield
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