Strategist at Westpac Richard Franulovich expects the greenback to remain under pressure in the near term.
Key Quotes
“Yield spreads now trending definitively against the USD index, the DXY weighted 2yr differential now down to +77bp vs +100bp at the start of the year. Fed Fund Futures now give just 45% probability for a hike before year’s end”.
“Such low odds if anything suggest now may be the time to wade back into USD longs. But, the technical damage the USD has suffered on the charts is too much to ignore, core US retail sales next week may disappoint and Fed officials will want to see at least a few weeks of stability and improved US data before making a more definitive judgment that downside risks are overstated”.
“The USD index could see 95/96 before more meaningful stability emerges”.
(Market News Provided by FXstreet)