The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts buyers for the third straight day, building on its recovery from a three-week low, touched last Thursday.
MUFG’s Lee Hardman notes the US Dollar is trading modestly weaker as US housing data disappoints and markets scale back expectations for an October Fed hike. Despite softer housing indicators, MUFG still expects one more Fed rate increase in December.
Commerzbank’s Antje Praefcke notes that the Dollar faces limited upside in coming days as markets await the Federal Reserve and ECB meetings next week. A December Fed hike is priced in, but no further tightening is expected by Commerzbank. With only second-tier US data and Middle East risks not adding fresh support, Praefcke expects relatively stable EUR/USD and sees little reason for significant Dollar gains.