The USD is trading mixed to a little firmer in broad terms. Economists at Scotiabank analyze Greenback’s outlook.
Choppy trading since late September reflects “late cycle” activity
The USD’s failure to advance on the back of stronger-than-expected data and higher yields on Tuesday supports the impression that choppy – but essentially flat – trading in the DXY since late September reflects ‘late cycle’ activity as investors consider the peak of the Fed tightening cycle and the peak in the US economy.
The lid on the DXY rally in the low 107 area is looking a little more solid.
In addition, tensions in Gaza rose further following Tuesday’s hospital blast which has inevitably triggered reactions from regional players as President Biden’s visit starts. The Senate speaker saga meanwhile limps on for another day with little prospect of a resolution and government shutdown risks increasing.