US Dollar: Momentum fades as yields stay high – MUFG
MUFG’s Lloyd Chan notes that the Dollar has extended its recent soft patch even as US Q3 GDP forecasts are upgraded to 2.5% annualized from 2.0%. Elevated fiscal deficits and long-end Treasury yields are weighing on sentiment.
The US dollar has continued its recent downward trend despite upgraded Q3 GDP growth forecasts. Elevated fiscal deficits and long-term Treasury yields are contributing to the dollar's weakened momentum, as highlighted by MUFG's Lloyd Chan. While speculative data still indicates a slight net long USD position, price action suggests fading upside potential near critical support levels.
The dollar's decline has brought it close to key support levels, but elevated US yields continue to weigh on its performance. Market sentiment remains cautious, with investors retaining a modest net long bias in the dollar. The divergence between dollar positioning and price action indicates a potential fading of dollar upside momentum.
The recent actions by the US Treasury, including doubling buyback operations for longer-dated government debt, may provide some support, but concerns over US-Canada trade tensions may keep the dollar under pressure.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
