USD faces draw back dangers regardless of current stabilization – Danske Financial institution
Though the US greenback has discovered momentary help from fairness features and easing commerce tensions, lingering comfortable knowledge and early indicators of labour market weak point recommend the dollar stays susceptible to a gradual decline, reinforcing a bearish medium-term outlook, Danske Financial institution’s FX analysts report.
EUR/USD dips nonetheless supply tactical ruying alternative
“Regardless of the USD stabilizing over the previous week – supported by a rebound in US equities, better-than-expected US figures and indicators that the Trump administration is stepping again from its most aggressive tariff threats – there nonetheless seems to be a detrimental danger premium embedded within the dollar.”
“What may drive additional USD weak point, assuming commerce coverage uncertainty has peaked and continues to recede? Whereas US comfortable knowledge have persistently disenchanted, this has but to completely materialize within the onerous knowledge. That stated, it could be solely a matter of time earlier than the weak point filters via, particularly as there are already tentative indicators of a softening labour market – regardless of the strong April NFP print.”
“With markets arguably having priced in some extent of slowdown, the following leg decrease within the USD is more likely to unfold extra regularly, barring a recent coverage shock. We stay tactically inclined to purchase EUR/USD on dips and keep our structural bearish USD view.”
