The Dollar Index’s (DXY) recovery looks overstretched after having appreciated 3% so far this month, DBS’ FX analyst Philip Wee notes.
“Although the Fed has rolled back the market’s expectations for more of last month’s 50 bps rate cut, it plans to follow up with two 25 bps cuts on November 7 and December 18 after the US Presidential Elections on November 5.”
“With this month’s rise in the US Treasury bond yields stalling near 4%, the DXY should be lower, around 102 instead of higher and close to 104.”
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