Cautious Fed Today Should Underline The Soft USD Outlook
USD: All focus today is the FOMC meeting later this afternoon. Markets go into the meeting with a conviction call that the Fed remains cautious, that both Fed and ECB liquidity is firmly in place for the summer forcing declining levels of volatility. While the Fed may be a little nearer to discussing tapering, most are not looking for the statement, new projections or Chair Powell’s press conference to unsettle markets. Markets seem quite comfortable with the view that Fed tapering could start in December this year, with the first-rate hike in early 2023. Assuming nothing too hawkish emerges, expect traded volatility levels to take another leg lower.
CAD: Spot remains well-supported in the upper 1.21s. Adjustment around the Fed’s policy decision appears to be the main motivator for the USD’s bid tone as underlying CAD fundamentals—spreads, crude oil prices—remain CAD-supportive. Fair value models for USDCAD continues to suggest that the USD’s gains are not supported by underlying fundamentals and continues to flag equilibrium for spot nearer 1.1850.
EUR: The expected cautious message from the Fed today should keep the general upward bias in EUR/USD in place. The EUR/USD slowly towards 1.25 in the summer months.
GBP: May UK headline and core CPI surprised on the upside with the headline number climbing above the 2% inflation target, largely due to reopening price rises. For today, this should be supportive of GBP as it underlines that the balance of risks is skewed to a tighter rather than a looser BoE policy setup. But with the UK CPI set to normalize in the latter part of 2022, most continue to think that BOE rate hikes are not imminent. Nonetheless, as the soft USD environment is set to unfold this summer the GBP/USD should also grind higher.
Get access to our market experts and sign up to receive the latest updates on any currency with our real-time exchange rate reports.
Sign up to receive the latest market news from our experts.
Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.