DXY gains might still extend towards 107/109 – Scotiabank

A decent move lower in the USD broadly greets traders today. Economists at Scotiabank analyze Greenback’s outlook.

Month-end in focus

Passive rebalancing for month and quarter-end may be checking the USD advance.

There is little more coverage on the screens of the USD’s broader advance looking stretched and some major currencies slipping deeper into undervaluation versus the USD but this has been a factor for a while and the USD is not relenting.

High absolute and relative yields and firm Oil prices remain broadly USD supportive and while we have a down session for the USD today, it will take a lot more to signal any sort of correction or sustained weakness in the USD at this point.

DXY gains might still extend towards 107/109.