He US dollar (USD) loses ground as North American markets return from the long weekend. Scotiabank economists analyze the outlook for the Dollar.
There is little to no faith that the USD's new year bounce will hold
Sentiment towards the Dollar had strengthened earlier this year; CFTC data on Friday shows that large speculative trading accounts have sharply reduced long euro positions and moved to a small net long dollar position in aggregate through mid-February, the first bullish bet on the dollar since November . However, the risk reversals suggest a weakening of the USD's higher protective demand over the past two weeks, rather suggesting that there is little to no faith in the USD's bounce being sustained in the new year. This would be in line with Trade's typical seasonal pattern (early year gains in the USD typically give way to weakness in Q2/Q3).
The USD's losses so far this week deserve attention, as some currencies begin to threaten the weak trend that has been in place since the beginning of the year.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
