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 launch of new tokens following headline-making events is not new in the crypto market.
Gold (XAU/USD) is seen building on the previous day's goodish rebound from the $3,613-3,612 area and gaining some follow-through positive traction during the Asian session on Friday.
The US Dollar stabilizes following Thursday's decline as market focus shifts to the University of Michigan's (UoM) preliminary Consumer Sentiment Index data for September.
Data shows the digital gold narrative may be in danger on the short term as Bitcoin has diverged from Gold in its 30-day Correlation.
The AUD/USD pair posts a fresh 10-month high near 0.6670 during the European trading session on Friday.
Related Instrument
