Analysts at Westpac noted that the USD is not trading well, Chair Yellen’s caution a major stumbling block and will produce more near term downside, but there’s still a case to be made for the upside, eventually.
Key Quotes:
“Weak durable shipments and spending data have put Q1 growth estimates in freefall, informed forecasters stripping a good 1ppt off Q1 in barely a couple days to the 0.5-1.0% range. If confirmed by more soft data in coming weeks Chair Yellen’s caution will be validated and a June hike would be off the table given the time needed to rebuild confidence in the outlook, not to mention the proximity of the UK referendum in June.”
“All told not an inspired USD outlook but we won’t get carried away. DXY downside shouldn’t extend beyond support levels into 93-94. Recent weak hard data has been a Jan/Feb story yet since then US financial conditions have eased sharply and all regional PMIs have risen strongly. DXY heavy but worth a buy into tech support at 93-94.”
(Market News Provided by FXstreet)