USD: Further gains harder to justify – ING
|The US Dollar (USD) found more support yesterday on the tail effect of Fed Chair Powell’s hawkish press conference and, more marginally, the US-China trade deal, ING's FX analyst Francesco Pesole notes.
DXY lacks the thrust to break above 100.00
"Throughout September and October, we have discussed how short-dollar trades clearly hit a roadblock and needed to be fuelled by more compelling negative USD news. The government shutdown has prevented jobs data from offering that catalyst, and Powell’s caution on a December cut has to be taken more at face value now."
"But our short-term call on the dollar remains more one of ‘lack of direction’ rather than the initiation of a more sustainable rebound. And the reason is precisely the lack of data releases, which incidentally prevents markets from making any conviction call on slower Fed easing. In our view, DXY lacks the thrust to break above 100.00."
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