Carry Trade Supportive Backdrop Holds as Dollar Stays Range-Bound
OCBC strategists say in-line US inflation and slightly lower odds of a September Fed hike leave the dollar range-bound and keep the carry-trade backdrop supportive.
OCBC strategists Sim Moh Siong and Christopher Wong said US inflation came in line with expectations and the market-implied probability of a September Federal Reserve rate hike edged modestly lower. As a result, the US dollar has been broadly range-bound.
The note, titled "Carry Trade: Supportive backdrop holds," argues that conditions remain supportive for carry trades. The strategists highlight the combination of subdued dollar direction and lower near-term Fed tightening odds as the key FX backdrop.
Source: FXStreet Forex News