Dollar’s drop might have come far enough for the time being – ING

FXStreet Insights Team FXStreet

The Dollar is hovering near recent lows. Economists at ING analyze USD outlook.

Don’t chase the Dollar bear trend

While acknowledging that November and December are seasonally soft months for the dollar, our view is that this Dollar sell-off has come a little early.

We are bearish on the Dollar through 2024 but expect the core driver to be a bullish steepening of the US Treasury curve – which has not happened yet. Indeed, US two-year Treasury yields remain firm near 5%. We thus urge caution in chasing this Dollar decline much further.

Until we get some clear dovish communication from the Fed or US data is materially weak enough, we think this Dollar drop might have come far enough for the time being and suspect that the 103.00/103.50 support area could well hold the DXY this week.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD remains in two-day highs around 1.3260

GBP/USD adds to Friday’s bounce, gathering fresh traction and flirting with the 1.3270 zone on Monday, or two-day tops. Cable’s decent advance comes despite the move higher in the Greenback and investors’ assessing of UK PM K. Starmer's resignation.

EUR/USD remains offered; focus is on 1.1400

EUR/USD rapidly gives back Friday’s rebound and trades with marked losses near 1.1420, or three-month lows, in the latter part of Monday’s NA session. The pair’s intensifies its retracement following the continuation of the robust upside momentum in the US Dollar. Next on tap will be preliminary PMIs the Germany and the Euroland.

Gold bounces off lows, looks to surpass $4,200

Gold regains composure and leaves behind three-consecutive daily declines on Monday, looking to regain the area above the $4,200 mark per troy ounce. Reports of progress in the latest round of US-Iran talks are helping the precious metal maintain its footing at the start of the week, although the stronger Greenback seems to limit the upside potential for now.

XRP recovery underpinned by persistent ETF inflows

Ripple (XRP) gains momentum on Monday, trading above $1.15 as the crypto market widely recovers. This recovery comes amid easing geopolitical tensions in the Middle East, following reports that the United States (US) and Iran made progress in the first round of talks aimed at achieving a lasting peace agreement.

Is Shiba Inu dead or just in a crisis? The data behind SHIB's 95% crash

SHIB, the dog-themed meme coin that became one of the biggest success stories in crypto and turned early buyers into crypto millionaires, is facing tough times. Its price has fallen more than 32% so far this year, and it is down 95% from its all-time high in 2021. Is SHIB simply another fading meme coin, or is the market overlooking a possible recovery story?

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.