DXY looks poised to retest its February high around 105.00 – Scotiabank
The powerful USD rally that drove markets on Thursday has extended further. Economists at Scotiabank analyze Dollar’s outlook.
There appears to be very little in the way of some additional USD progress
Despite the focus on central bank prospects, broader Dollar gains are moving a little ahead of shifts in interest rates. US 2Y yields are around 3 bps lower on the session today which is bit more than other markets (ex UK). Still, investors have warmed to the goldilocks economic picture the Fed outlined earlier this week and there appears to be very little in the way of some additional USD progress at least at this point.
Rather than heading towards a 102.00 handle, the DXY now looks poised to retest its February high around 105.00. Rates or spreads may need to shift more significantly in the USD’s favour for gains to extend much beyond there, however.
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