Analysts at Bank of Tokyo Mitsubishi explained that downside pressure on the US dollar is set to persist over the coming weeks as investors adjust to the risk of an even slower pace of monetary tightening than assumed prior to the March FOMC meeting and the speech in New York.
Key Quotes:
"There are certainly now risks of certain currencies overshooting versus the dollar as long US dollar positions are squeezed further.
The pound is also advancing versus the US dollar and this episode of dollar weakness will likely mean a sharper fall back once US dollar sentiment stabilises.
Our short-term fair-value model for GBP/USD already indicates a substantial overshoot and with ‘Brexit’ uncertainty set to undermine economic activity, renewed pound weakness seems likely."
(Market News Provided by FXstreet)