USD Index to consolidate above the 105 area – ING
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The Dollar has entered a consolidative mode. Today, several FOMC policymakers will be delivering speeches. Economists at ING favour further USD consolidation.
“We note the rise in USDCNH which may be giving the Dollar a little support. Somewhat conversely, the better news out of China seems to be giving the local banks some problems. Here, retail investors have en masse withdrawn from Chinese bond markets in favour of equities, prompting authorities to check with local banks whether they have sufficient liquidity to meet these withdrawals.”
“For today, we have five Fed speakers. Market pricing for the 14 December FOMC meeting is settling on a 50 bps hike – such that any further reference to that today need not demand a much weaker Dollar.”
“Our slight bias near term is that long Dollar position adjustment may have a little further to run, but that something like the 105 area in DXY proves a 4Q22 base.”
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