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- USD Index: Risks tilted towards another 2-3% drop at least in the coming weeks and months – Scotiabank
USD Index: Risks tilted towards another 2-3% drop at least in the coming weeks and months – Scotiabank
USD losses extend. Shaun Osborne, Chief FX Strategist at Scotiabank, analyzes the Greenback’s outlook.
USD to be more susceptible to weak economic data reports moving forward
Economic data this week have cut the odds of the Fed delivering two more hikes this year and history shows markets are quick to discount the prospect of lower Fed rates once the rate cycle peak is in; history also shows that this typically pressures the USD and that feels about where we are in this process, with the USD trading at its lowest since last April. The USD is likely to be more susceptible to weak economic data reports moving forward.
The DXY is down nearly 2% on the week and is trading below the January and April lows at 100.8. This implies (to me) that risks are tilted towards another 2-3% drop at least in the coming weeks and months (which could stretch to a loss of around 5%, based on the charts).
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