Sell the Dollar On Data and Fed: Currency Strategist

As the market speculates on whether the Federal Reserve will ease monetary policy at its meeting on Aug. 10, one analyst is predicting more losses for the dollar.

The Federal Reserve headquarters in Washington, DC.

Fed Chairman Ben Bernanke and the Federal Open Market Committee (FOMC) will change the tone of their language to indicate to the market that the Fed sees the risks on the economy to the downside, Thanos Papasavvas, head of currency management at Investec Asset Management, said.

“Next week we will get a change in language and Bernanke will then wait for two or three months to see if the data will warrant a move on further quantitative easing,” Papasavvas said.

This will be dollar negative, with both weak data and expectations of further Fed easing driving the US currency lower, he predicted. Read more