US Dollar bear trend to gain momentum over the coming months – ING
Source Fxstreet
The US Dollar (USD) dropped after the FOMC meeting revealed a Fed committed to rate cuts. Economists at ING analyze Greenback’s outlook.
The start of an important new trend for the Dollar, should US price data soften
Financial markets have reacted positively to a soft landing scenario, where the Fed seems biased to cut rates even though the economy is doing quite well.
For the Dollar, we think this could be the start of something important. we have felt the second quarter would be the period when a meaningful USD bear trend would start to develop in advance of the first Fed cut.
Additionally, seasonal factors are less Dollar-supportive from April onwards. It is a big if, but if the March US price data does start to edge lower – validating the Fed's scepticism over high early-year inflation – then we can start to see a Dollar bear trend gain momentum over the coming months.
We doubt US data will be a big market mover today and see DXY staying gently offered.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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