OCBC: Limited USD Downside as Fed Caution Persists
OCBC’s Sim Moh Siong warns that recent risk-on sentiment following a U.S.-Iran understanding has only triggered a modest pullback in yields and the dollar, while AI-driven growth, Fed event risk, and oil dynamics continue to underpin the greenback.
OCBC strategist Sim Moh Siong argues that the dollar’s downside remains capped as the Federal Reserve maintains a cautious stance. While risk appetite improved after a reported U.S.-Iran understanding, the resulting decline in U.S. yields and the dollar was modest, suggesting limited room for further weakening.
The strategist points to several supportive factors for the USD: AI-driven U.S. growth potential, upcoming Fed event risk, and evolving oil market dynamics. These elements are expected to keep the greenback resilient even amid short-term risk-on moves.
Source: FXStreet Forex News