Imre Speizer, Senior Markets Strategist at Westpac, notes that the faith in the US dollar’s uptrend has understandably taken a knock amid stretched positioning and the disappointing stimulus package the ECB delivered last week.
“However, Chair Yellen has put her final seal of approval in favour of Dec lift-off and Friday’s strong payrolls report removed the risk of any last-minute data shocks.”
“US rates have further to go to before December is fully priced in - it may not be much but mechanically the front end-can rise a touch further and thus confer a little more support for USD.”
“The USD index (DXY) could have another stab below 98.0 near term but should eventually sustain a rise beyond 100.0.”
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