USD: The dollar rebound has been mediocre – ing

This was always a very busy week for the markets, since some key meetings of central banks – including that of the Federal Reserve – were scheduled to refresh the market understanding about the position of those responsible for monetary policy regarding the balance between inflation and growth in the second month of the global protectionism of the US Energy markets can easily have an impact on the inflation evaluations of the central banks, says Francesco Pesole, an Ing currency analyst.

The explorations below 98.0 in the DXY may not last long

“Therefore, we should start with geopolitics. The largest risk premium in oil prices is justified and interruptions could push the brent prices by $ 80/bbl or even $ The central bankers are expected to be more cautious with relief or moderate orientation.

“But a tougher Fed is not enough to maintain the demand of the dollar in the current environment. The USD rebound since the Israel-Iran attacks began has been relatively content and is now going down largely. This despite the fact that there are no signs of unwritten in the region and oil prices are kept back. In our opinion, that is once again the symptom of the distrust of the market in this time, What even a clearly positive event for the dollar, such as a clash in oil prices mixed with geopolitical tensions, fails to discourage the methodical construction of short positions in USD that we have observed in recent months every time the dollar tried a recovery. “

“With the treasure yields determining instead of encouraging a return to the USD in the current environment, we believe that future dollar rebounds should remain dismissed. At the same time, however, the downward risks for the USD are probably minor now that geopolitical risks have increased, and considering how much risk premium is already in the dollar. The explorations below 98.0 in the DXY Time unless there are signs of de -escalation.