DOLLAR’S UPSIDE RISKS REMAIN SUBSTANTIAL – ING
There is a risk that the breather in bonds and the Dollar correction are too reliant on expectations of a jobs data miss, economists at ING report.
Hard to follow a Dollar correction now
Any tentative Dollar correction is not finding too many followers. The swing in rate advantage after the recent bond sell-off makes the Dollar a very hard sell, and cautious trading ahead of US payrolls on Friday shouldn’t help.
DXY may stabilise around 107.00 today, as markets will assess whether jobless claims can continue to surprise on the downside (bearish for bonds, positive for the Dollar), while a number of Federal Reserve speakers are scheduled to deliver remarks. Most speakers are hawks, so expect more support for another hike.
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