Path to additional USD strength via yield differentials to be choppy and perhaps somewhat limited – Scotiabank DollarIndex USDJPY EURUSD USDCAD Banks
The USD is trading mixed, but off earlier highs in broad terms on the day. Economists at Scotiabank discuss the greenback outlook.Markets were pricing in around 17 bps for Fed tightening for this month – until comments from Jefferson and Harker supported the Fed ‘skipping’ a hike at the upcoming meeting, dumping pricing back to 8 bps; Jul pricing still reflects around 80% probability of a 25 bps hike.
While short-term spreads have moved incrementally in support of recent USD gains the path to additional USD strength via yield differentials is likely to be choppy and perhaps somewhat limited.Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets.
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