US Greenback (USD) held on to delicate features, amid rise in UST yields and forward of US CPI (Tuesday). DXY was final at 97.9 ranges, OCBC’s FX analysts Frances Cheung and Christopher Wong observe.
Bullish momentum on each day chart intact
“Trump introduced tariffs over the weekend – 30% on all imports from Mexico and the EU (wef. 1 August) considerably weighed on threat proxies. US and European futures have been down whereas Asian equities traded blended this morning. Asian and high-beta FX have been largely buying and selling on the again foot with NZD, AUD, PHP and IDR main losses whereas treasured metals have been firmer.”
“Bullish momentum on each day chart intact however rise in RSI moderated. We proceed to warning for the chance of delicate USD rebound within the close to time period however search for alternatives on rally to fade into. US knowledge this week – CPI (Tuesday); PPI (Wednesday); retail gross sales (Thursday); Uni of Michigan sentiment (Friday) in focus. Any slippage in knowledge could function a superb entry level to fade this USD bounce.”
“General, we nonetheless anticipate USD to commerce weaker as USD diversification/ re-allocation pattern, Fed lower cycle take centre-stage. US coverage unpredictability, and considerations of concerning the rising trajectory of debt and deficits within the medium time period ought to proceed to underpin the broad (and sure, bumpy) decline within the USD.”
