USD recovery may have more to run – ING

The Dollar rebound has started to gain some momentum. Economists at ING analyze USD outlook.

Fed hawks step in

Fed speakers have delivered hawkish comments, emphasising the fight against inflation and keeping options open for December. Expect more pushback against dovish bets as Powell takes the stage today and tomorrow.

We could see the USD find a bit more support in the remainder of the week. 

A return to 106.00 in DXY looks on the cards over the coming days, although a move to 106.50 would probably require the 2-year USD swap rate moving back to 5.0%, which might only happen after some reassuring US data comes through.