US: Underwhelming US GDP to result in new 2023 lows for the Dollar – SocGen

The Dollar languishes before US Gross Domestic Product (GDP) for the first quarter. The greenback could challenge 2023 lows on disappointing figures, economists at Société Générale report. 

Current set-up in is to sell dips in bonds and rallies in the Dollar

“The current set-up in bonds and FX is to sell dips in bonds (lower yields) and rallies in the Dollar. Barring much stronger outcomes for GDP and PCE inflation, investors are unlikely to change tactics today.” 

“The asymmetric reaction function means that investors won’t hesitate to respond if the data underwhelms, potentially resulting in new 2023 lows for the Dollar.”

“The 10y UST backed away from last week’s low of 3.319%. Resistance is situated around 3.58%.”

See – US GDP Preview: Forecasts from ten major banks, firm growth