There may be little potential for USD gains to develop further – Scotiabank
Source Fxstreet
The US Dollar Index (DXY) recovers above 104.00. Economists at Scotiabank analyze Greenback’s outlook.
Spreads have moved only marginally in the USD’s favour over the past month
Although markets continue to reprice Fed rate cut risks in the coming months (Fed swaps imply only 75 bps of easing through the end of the year now, about half of what was priced in at the start of February), this is not an obvious driver of USD gains because implied rate cuts by other central banks have been slashed as well.
Spreads have moved only marginally (5-6 bps for 2Y spreads) in the USD’s favour over the past month and the DXY is still trading above my estimated fair value (based on DXY-weighted yield differentials) which sits at 103.04 today.
There may be little potential for USD gains to develop further, in other words.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
Recommended Articles
The Euro extended its gains for the second straight day against the Japanese Yen and is up by 0.22% as the EUR/JPY trades at 162.47 late during the North American session.
Tesla Did Not Sell Its 11,509 Bitcoin, On-Chain Data RevealsOn-chain data indicates that Tesla Inc. has retained its entire Bitcoin holdings, dispelling recent speculation about a potential sale. Last week, blockchain analytics firm Arkham Intelligence reported that Tesla had transferred its entire stash of 11,509 BTC—currently valued at over $776 million—to new, unidentified wallets. This substantial movement led to widespread conjecture that Elon Musk’s […]
On-chain data indicates that Tesla Inc. has retained its entire Bitcoin holdings, dispelling recent speculation about a potential sale. Last week, blockchain analytics firm Arkham Intelligence reported that Tesla had transferred its entire stash of 11,509 BTC—currently valued at over $776 million—to new, unidentified wallets. This substantial movement led to widespread conjecture that Elon Musk’s […]
Gold jumps above $4,440 as geopolitical flare, Fed cut bets mountGold (XAU/USD) rallies over 2% on Monday, reaching a record high of $4,442 amid rising geopolitical tensions and expectations that the Federal Reserve (Fed) will continue to reduce interest rates next year, pushing US Treasury yields lower.
Gold (XAU/USD) rallies over 2% on Monday, reaching a record high of $4,442 amid rising geopolitical tensions and expectations that the Federal Reserve (Fed) will continue to reduce interest rates next year, pushing US Treasury yields lower.
Silver Price Forecasts: XAG/USD drops below $75.00 after Trump - Zelenkyy’s meeting Silver (XAG/USD) has lost more than $10 since hitting a fresh record high near $86.00 on Monday’s early trading. The precious metal has retreated to levels in the $74.00 area at the time of writing, weighed by comments by US President Trump about the chances of a peace deal in Ukraine.
Silver (XAG/USD) has lost more than $10 since hitting a fresh record high near $86.00 on Monday’s early trading. The precious metal has retreated to levels in the $74.00 area at the time of writing, weighed by comments by US President Trump about the chances of a peace deal in Ukraine.
Gold price (XAU/USD) is down 0.8% to near $4,140 during the European trading session on Monday. The precious metal faces selling pressure as the three-day rally hits a pause after failing to extend above $4,202.
Related Instrument
