US Dollar Gains Moderate as Yields Dip Ahead of FOMC
Scotia strategists see the US dollar’s broad rally losing momentum as Treasury yields retreat and risk appetite improves before the Fed decision.
The US dollar’s recent broad advance is losing steam as US yields pull back and market sentiment turns more buoyant ahead of the Federal Reserve’s policy announcement, according to Scotiabank.
Strategists Shaun Osborne and Eric Theoret point to the retreat in yields as a key factor capping further dollar gains. At the same time, a tech-led improvement in risk appetite has encouraged some rotation away from the greenback.
The moderation comes with the FOMC meeting squarely in focus. While the dollar remains supported by relatively hawkish Fed expectations, the combination of softer yields and an improved risk backdrop is temporarily blunting its upside momentum.
Source: FXStreet Forex News