USD slide resumes after brief pause – Scotiabank
After a brief pause yesterday as stocks slumped, the US Dollar (USD) slide is resuming this morning as US growth concerns continue to weigh on sentiment. US bond yields have edged fractionally lower, in contrast to mostly higher yields in Europe, keeping the shift in spreads running against the USD, Scotiabank's Chief FX Strategist Shaun Osborne notes.
USD may be on the cusp of another, sharp leg lower
"The NFIB Small-Business Optimism index fell slightly more than expected in February, the just-released data shows, with respondents citing uncertainty around President Trump’s policies as a factor. The economic outlook component saw its sharpest fall in nearly three years while more companies raised prices, or plan to do so in the coming months."
"On the session so far, the USD is down against all majors except the CHF and JPY (amid signs that global stocks have steadied). European FX is generally firmer, with the EUR carving out another solid advance on the day. It’s another quiet day data-wise. There is a 3Y auction (13ET for the results). Later, Japan releases PPI data and the BSI activity surveys which may provide some guidance for trends in the BoJ’s tankan survey due at the end of the month."
"Technically, the DXY’s renewed weakness today suggests another potentially significant leg lower is about to unfold for the index. The DXY managed to steady near to the 104 level yesterday but the failure to regain that point in a sustained way keeps the focus on the downside and a further 2-4% drop in the next few weeks."
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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.
