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US Dollar outlook turns bearish as weaker data and buybacks weigh
TD Securities links the shift to a Treasury buyback that pushed the DXY below its 200-day moving average, while near-term Fed hike odds face additional repricing risk.
TD Securities strategists say the US Dollar has returned to a bearish regime, citing a Treasury buyback announcement on Aug. 19 that pushed the US Dollar Index (DXY) below its 200-day SMA.
They point to weaker US data, rising US institutional credibility, and potential “financial repression” risks as contributors to downside pressure on the USD over the coming weeks.
The team also flags Jackson Hole communication risk, saying market expectations for near-term Fed rate hikes may have more room to be priced out unless US data strengthens again.
According to the strategists, USD positioning has flipped from long to short, with implied-volatility indicators broadly flipping toward USD puts versus G10 currencies, suggesting investors are pressing for further USD declines.
Latest closeDollar index 99.64 ▼0.3%