US Dollar Index (DXY) recovers above 104.00. Scotiabank economists analyze the outlook for the Dollar.
Spreads have moved modestly in favor of the USD in the last month
Although markets continue to reassess the risks of a Fed rate cut in the coming months (Fed swaps now imply only 75 basis points of easing through the end of the year, about half of what was forecast in early February) , this is not an obvious driver of USD gains because implied rate cuts from other central banks have also tapered sharply.
Spreads have moved only marginally (5-6 basis points for 2-year spreads) in favor of the USD over the past month and DXY continues to trade above my fair value estimate (based on yield-weighted yield spreads). DXY), which today stands at 103.04 points.
In other words, there may be little potential for further USD gains to develop.
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.
