Pullbacks appear limited in USD – Westpac

FXStreet (Edinburgh) – In the view of Richard Franulovich, Strategist at Westpac, the greenback – in terms of the USD Index – keeps its bullish stance intact.

Key Quotes

“The USD’s cyclical advantages, most notably the shift in policy differentials in its favour, is now a very mature theme and there is still a relatively large overhang of USD longs”.

“Yet yield spreads (on a DXY weighted basis) continue to grind in its favour, though admittedly not with the same force as they did last year”.

“That trend should continue amid ongoing ECB easing and with markets far from fully pricing in Fed lift-off potentially as soon as 17 Sep”.

“A run in the USD index toward the March 2015 highs near 100 may not be on the immediate horizon but with the USD’s cyclical advantages still very much intact, dips should be limited, the USD index unlikely to trade very long below 96, if at all”.

“We stick with a bullish 1 week and 3 month prognosis for the USD”.

In the view of Richard Franulovich, Strategist at Westpac, the greenback – in terms of the USD Index – keeps its bullish stance intact…

(Market News Provided by FXstreet)