Scotiabank Flags Downside Risk for Dollar Ahead of FOMC
Scotiabank strategists say the US dollar is narrowly mixed to softer heading into the FOMC meeting, with swaps markets pricing a modest probability of a rate hike.
DXY
The US dollar is trading mixed to softer just before the Federal Reserve’s policy announcement, according to Scotiabank. Strategists Shaun Osborne and Eric Theoret highlight that interest-rate swaps are pricing in a modest likelihood of a hike, but the bank views that risk as overstated.
The dollar’s near-term direction hinges on the FOMC’s guidance, with downside potential if the hawkish tail risk fades. The note suggests the greenback could weaken further once the event risk passes.
Source: FXStreet Forex News