USD: Consolidation amid soft undertone – Scotiabank

The USD is experiencing mixed trading, regaining some ground against core majors after earlier losses. The undertone remains bearish, with concerns about Fed policy autonomy impacting investor sentiment. The DXY index is close to key support levels, and minor gains may attract sellers, note Scotiabank Chief FX Strategist Shaun Osborne and FX Strategist Eric Theoret.

USD trading mixed with bearish undertone

"Some investors at least are not persuaded that sound policies are being pursued, and we still rather think that the USD’s outlook is handicapped by investor worries about risks to the Fed policy autonomy."

"While the DXY is trading firmer again this morning, gains largely reflect a consolidation in price at very soft levels."

"The index pierced key support at 96.20/30 briefly yesterday and remains close to that point this morning."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)