Fed's Kashkari on rates and the $USDTHB reaction
Kashkari's comments yesterday about the Fed potentially holding rates steady for 'an extended period' definitely caught my attention. While not a huge deviation from recent Fed speak, the emphasis on 'extended' without immediate cuts on the horizon could lend some underlying support to the dollar, especially against EM currencies. We're seeing $USDTHB holding around 33.57 today after testing 33.67 earlier, showing some resilience. For my watchlist, I'm leaning into the idea that we might see some further attempts at the 33.70-33.80 range if the market interprets this as continued hawkishness from a typically dovish voice. Less convinced about the direct read-through to $TRYUSD today, given its own domestic drivers, currently at 0.02125322. Seems more of a structural play there.
I'm with you on Kashkari's remarks. The 'extended period' framing seems to be taking root, and it's certainly a factor for currencies like $USDTHB where interest rate differentials play a significant role. It'll be interesting to see if this sentiment is consistently reiterated by other Fed members.