Dollar selloff extends as DXY dips below 100.0, ING flags positioning unwind
The US dollar’s post-Fed decline accelerated with DXY briefly dipping below 100.0, back to levels seen after Kevin Warsh’s June press conference. ING’s Francesco Pesole points to stretched long USD positioning as a driver.
The US dollar’s post-FOMC selloff has gathered pace, pushing the DXY index briefly below the 100.0 handle. ING’s Francesco Pesole noted that the move takes the greenback back to territory last seen after Kevin Warsh’s June press conference.
Pesole flagged stretched net-long USD positioning against G9 currencies and large EUR/USD positions as factors likely fueling the extended unwind. The unwinding of overcrowded dollar longs appears to be accelerating the decline.
DXY’s drop below 100.0 marks a psychological level break, and with positioning still extended, further downside may be in store if the trend continues.
Source: FXStreet Forex News