Kit Juckes, Chief Global FX Strategist at Société Générale, analyzes what is needed for trades to get short USD.
The market wants more evidence to justify getting short USD
The market wants more evidence to justify getting short USD (today’s US CPI data are in focus but the omens aren’t good, a fall in headline inflation from 3.7% to 3.3% would be ignored and a steady 4.1% core rate would merely support the ‘high for long’ crowd and leave the markets waiting for confirmation that growth is slowing. This doesn’t really raise my hopes of a breakout by EUR/USD this week, ho hum!
The market overall is going to need more evidence of a US slowdown before it buys properly into the idea of a weaker Dollar.
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