News & analysis

With Treasury yields and the dollar rising considerably in recent weeks, the main question for investors heading into this week was whether upward momentum would be sustained or a reversal was due. Markets were leaning towards an extension of recent price action given the strength of US data in recent weeks, but this proved to be the wrong bet as the Fed was interpreted as dovish by markets and Friday’s payrolls data landed weak enough to fuel speculation that the US central bank would cut more than once this year. While both developments dented our bullish dollar call, we think it remains too premature to turn structurally bearish on the greenback. With the US data calendar thinning out next week ahead of April’s CPI report on May 15th, the focus will shift to other major central banks. Here, we suspect we’ll see an array of decisions. 

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Authors: 

Simon Harvey, Head of FX Analysis

María Marcos, FX Market Analyst

Nick Rees, FX Market Analyst

 

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