Balance of risks for the greenback remains skewed to the upside – ING
Dollar strength is here to stay. With risk assets continuing to show instability and markets having now made a conviction call on the Fed's aggressive tightening cycle, the dollar has likely found a new floor, economists at ING report.
Turbulent markets mean supported dollar
“Trying to pick the tops in the dollar rally is a risky challenge. The Fed’s tightening cycle is largely priced in, but we surely do not see the divergence between market expectations and central bank communication that we witness in the case of other major central banks. With the Federal Reserve having largely endorsed the market’s hawkish pricing, any risk related to a material dovish re-pricing seems quite remote for the dollar.”
“Further dollar gains look more likely against high-beta currencies, but DXY (where low yielders weigh more) may still break above two-year highs and consolidate above 103.”
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FXStreet Insights Team
FXStreet
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