Currencies
Barclays Sees Dollar Rallying 1% Ahead of Fed’s Crucial Decision
- Markets predict Fed cut too large: Barclays’ Montgomery Koning
- She forecasts retail-sales report will be better than expected
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The dollar is poised to rally, as traders are overestimating the extent of Federal Reserve rate cuts and underestimating a retail sales report coming on Tuesday, said Skylar Montgomery Koning, a foreign-exchange strategist at Barclays.
She predicts that stronger-than-expected retail sales will shift market bets toward a smaller rate reduction, and therefore boost the dollar. With only two days before the rate announcement, traders’ uncertainty about the decision is the highest since 2007 and this consumer report is one of the last pieces of information ahead of it.