USD Index: Door pretty wide open for some deeper consolidation ahead – Scotiabank
The USD remains firm. Economists at Scotiabank analyze Greenback’s outlook.
The high for longer narrative is USD supportive
The DXY looks poised to lock in a tenth, consecutive weekly gain. US yields popped to new cycle highs following the Fed decision Wednesday and are maintaining gains through their former 2023 highs across the curve.
The high for longer narrative that has emerged after the FOMC decision is USD supportive but even with yields above recent highs, the USD’s broader valuation looks a little overdone; stretched valuation, even in the short run, plus the extended USD run higher over the past 2 1/2 months leaves the door pretty wide open for some deeper USD consolidation ahead (particularly considering strike, government shutdown risks).
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