Mazen Issa, Senior FX Strategist at TDS, notes that the USD trades on its backfoot but largely at the benefit of the EUR.
Key Quotes
“Still, there are a number of emerging signs that suggests the USD is vulnerable as a “convergent” narrative deepens and US exceptionalism fades.”
“Indeed, relative data momentum and escalating trade disputes are notable headwinds for the USD. We see little reprieve in the latter with the G7 Summit about to begin and indications that this will likely be a contentious meeting. The technical backdrop for the DXY is also precarious.”
“This should leave the EUR on better footing overall, though we think considerable focus should be placed on the crosses as the Fed decision next week may interject noise into EURUSD.”
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