USD regains some ground – Scotiabank
|The USD is tracking a little higher so far today but markets appear to be idling as investors await data and developments. Dollar gains are marginal in broad terms but more significant gains have been notched up against the high beta/commodity currencies—AUD, NZD, SEK, NOK—following mixed equity market returns in Asia and flat to mildly weaker trends in US equity futures, Scotiabank's Chief FX Strategist Shaun Osborne notes.
Underlying trends remain bearish
"Investors remain concerned that US reciprocal tariff action due in April may further disrupt risk appetite. Yesterday’s US CPI data brought some mixed news on prices. Headline and core rates of inflation came in lower than forecast. But some of the dampening effects on inflation (lower airfares) may not be reflected in the PCE data and airfare weakness may be a further sign of softer consumer demand."
"While the DXY has picked up a little ground, gains are limited and the market may only be developing a mild technical correction within the confines of what appears to be a still-developing downtrend. Trend momentum signals are aligning bearishly for the index across the short-, medium– and long-term studies which is typically a sign that countertrend rallies or rebounds will be limited in terms of scale and duration."
"Typically, therefore, these sorts of rebounds would be an opportunity to reload or add to short positioning. DXY resistance sits at 103.70, near current levels, and 104.00/05. Recent CFTC data has reflected a reduction in net USD long positioning but investors remain generally long USDs. Other data suggests that active traders have not reduced USD exposure all that much, however."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.