It appears too early for the Dollar to re-enter a sustained downtrend – ING
US Dollar struggles to benefit from hawkish Fed commentary. Economists at ING believe that a more patient trading environment could return.
May be too early to jump back on short-Dollar bets
“Markets are seeing this moment as the peak in the Fed’s hawkish communication and are now eyeing opportunities to re-enter short-USD pro-cyclical positions at more attractive levels. However, there is still some room for USD rates to absorb further hawkish repricing in rates expectations, and the rebound in risk currencies may be premature.”
“We think that a more patient trading environment could return after this morning’s risk-on mood and last until Tuesday’s pivotal US inflation report.”
“In FX, it appears too early for the Dollar to re-enter a sustained downtrend: local stories may instead take centre stage.”