DXY on track to hit 108.00 on another bearish leg to 4.75% in US 10-year bonds – ING

FXStreet Insights Team FXStreet

Monday’s price action set markets back on the short-bonds/long-USD track that has been the norm since mid-July. Economists at ING analyze USD outlook.

Markets are steadily back on a short-bond/long-dollar track

The USD 2-year swap rate climbed back above 5.0% on Monday, which might now work as a floor with the Fed sending hawkish messages and barring a turn for the worst in US data in the near term. The residual gap between the dot plot projections and market pricing for 2023 and 2024 also indicates good chances that USD short-term rates can build some support.

Volatility in back-end yields should continue to determine the direction of FX moves.

Another bearish leg to 4.75%+ in US 10-year bonds can probably keep DXY on track to hit 108.00 in the near future.

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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.

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