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Weaker US data and lower yields weigh on dollar resilience

MUFG expects the dollar to weaken modestly into next year even as the DXY holds above its 200-day moving average around 99.200.

Reported · Written up by our desk · Major Pairs

MUFG analysts Derek Halpenny and Lee Hardman said softer US economic data and lower short-term Treasury yields are undermining US Dollar support, even as the US Dollar Index remains above its 200-day moving average near 99.200, according to FXStreet.

They cited weaker retail sales, Nonfarm Payrolls, and Consumer Price Index readings, along with reduced pricing for Federal Reserve hikes, as factors shifting expectations away from a stronger dollar.

MUFG expects the dollar to weaken modestly heading into next year, framing current conditions as a challenge to USD resilience.

FXStreet also noted the impact on key pairs in early trading, including GBP/USD holding above the 1.3550 area and EUR/USD extending gains above 1.1600, as US dollar selling bias persisted.

Latest closeEUR/USD 1.157 ▲0.4%|GBP/USD 1.354 ▲0.3%|Dollar index 99.64 ▼0.3%

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