18 May 2015
Dollar remains vulnerable – BBH
FXStreet (Edinburgh) - Analysts at BBH assessed the current conditions surrounding the greenback.
Key Quotes
“The recent pattern in the market is for the dollar to be sold on disappointing news, but does not rally on better data”.
“We suspect this is an important reflection of market psychology. It is consistent with our technical analysis, which warns that the dollar's downside correction may not be complete”.
“In addition to the disappointing US data weighing the dollar, the unwinding of long European bond positions have also spurred euro short-covering and taken away the bid from the dollar more generally”.
“The economic reports in the week ahead will not provide new incentives to sell European bonds and German bunds in particular”.
“The flash May PMI composite may ease from 53.9 in April, which would be the second consecutive monthly decline. Separately, the German IFO and ZEW surveys may also slip”.
Key Quotes
“The recent pattern in the market is for the dollar to be sold on disappointing news, but does not rally on better data”.
“We suspect this is an important reflection of market psychology. It is consistent with our technical analysis, which warns that the dollar's downside correction may not be complete”.
“In addition to the disappointing US data weighing the dollar, the unwinding of long European bond positions have also spurred euro short-covering and taken away the bid from the dollar more generally”.
“The economic reports in the week ahead will not provide new incentives to sell European bonds and German bunds in particular”.
“The flash May PMI composite may ease from 53.9 in April, which would be the second consecutive monthly decline. Separately, the German IFO and ZEW surveys may also slip”.