According to analysts from Rabobank, if the incoming US economic data do not deter the market from its bullish expectations surrounding the US labour report on Friday, it seems likely that the US dollar will remain well supported against a large basket of
currencies near-term.
Key Quotes:
“In our view, the market is in danger of pricing in too much inflation risk. Assuming that the Fed retains a cautious view and that this is justified by economic data releases, there is scope for some of the enthusiasm that has been supporting the USD to be reined back over the coming quarter or two.”
“While we see scope for the USD to soften in the months ahead, upside may have further to run in the short-term. For sure, in a week when the market is feeling so optimistic about the forthcoming payrolls release, it seems very likely that the greenback will find strong support. The 93.00/93.20 area is the next psychological resistance for the DXY dollar index.”
