FXStreet reports that according to economists at Westpac, DXY (US Dollar Index) is unlikely to revisit sub-90 levels anytime soon.
“The USD is in a much healthier place now the Fed is inching toward the exits. Discussions are actively taking place about talking tapering and a large swathe of the FOMC brought forward the timing of rate hikes, notably, the median dot projects two hikes by end-2023.”
“With the timeline for lifting Fed Funds moving forward and a modest tapering likely to take 12 months or so, the taper timeline has arguably shifted forward too, a start date of late 2021 now looking more likely.”
“A return to sub-90 trade for the DXY seems unlikely near term, if anything there’s scope for multi-day upside toward 92-93 to bring DXY closer into line with yield spreads. But further sustained upside beyond that seems unlikely.”
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