Fed Patience Caps Dollar Weakness – OCBC
OCBC strategist Sim Moh Siong says the US dollar is supported by the Fed's patient stance, with FX markets in a holding pattern ahead of the FOMC. Falling oil prices alleviate inflation concerns but have limited room to weigh further on the greenback.
OCBC's Sim Moh Siong notes that the US dollar is finding a floor as the Federal Reserve's cautious approach reduces the likelihood of aggressive rate cuts. FX markets remain in a wait-and-see mode ahead of the upcoming FOMC decision.
The recent drop in oil prices has helped ease imported inflation fears, which could have otherwise pressured the dollar. However, Siong sees limited scope for further oil-driven drag on the greenback, as the move appears largely priced in.
Overall, the dollar is expected to stay range-bound in the near term, with the Fed's patience tempering any significant downside momentum.
Source: FXStreet Forex News