The USD is broadly weaker again as the global risk premium ebbs, reflecting a reduction in FX vols, offering support to the high-beta complex, according to Mark McCormick, North American Head of FX Strategy at TD Securities.
Key Quotes
“While the Fed looks set to hike next week, the rest of world CBs are also turning more hawkish, which helped to cap the USD rally despite rate differentials.”
“The next key level to watch in the DXY is a possible break below 94. The US yield curve has steepened back to 26bp but the G9 curve remains steeper, offering support to EUR and other European currencies. We continue to like a retest of 1.18, especially as EZ bank shares mark their best performance in months. The key, here, is that ROW equities are converging with the US.”
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