Japan Declines Comment on BOJ’s Absence From Global Support Statement for Fed Chair Powell. Source: Asturio Cantabrio, CC BY-SA 4.0, via Wikimedia Commons 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
RBA Expected to Raise Interest Rates by 25 Basis Points in February, ANZ Forecast Says 
Thailand Economy Faces Competitiveness Challenges as Strong Baht and U.S. Tariffs Pressure Exports 
Bank of Korea Expected to Hold Interest Rates as Weak Won Limits Policy Easing 
In the mid of challenging global environment, the Fed opted for a rate hike to bring the global economy back on track. Fed policy outlooks are expected to be more divergence than the rest of the world and fairly priced into forward rates. This backdrop is expected to support the extension of the USD rally in the months to come, mainly against the EUR since the ECB prefers easing.
While the direction of the USD is broadly shared, the length of the rally and the conviction about the direction are highly contested. In this debate, we are more bearish than most on the EUR and more optimistic on the US dollar.
The market is on doubt that the US economy can endure the combination of higher rates and stronger US dollar and anticipates two-three hikes every other meetings.
"The main disagreement is about the length of the initial hiking path rather than the timing of the first hike. We believe that the Fed intends to deliver four 25bp hikes every other meeting when the cycle begins, reaching 1% in 12 months; furthermore, we think it will most likely succeed", says Barclays.
