USD downside appears limited – Westpac

According to strategists at Westpac, the decline in the greenback could slow its pace in the next weeks.

Key Quotes

“Still a challenging backdrop, a range of data suggesting Q1 growth will be sub-par while weak March import prices, PPI and CPI all suggest the recent jump in inflation may indeed prove transitory, much as Chair Yellen has said lately”.

“Safe to assume next week's Fed meeting will build on the aforementioned, the guidance likely to signal a lack of urgency once again and that risks still persist”. 

“USD weakness though shouldn't extend more than a few weeks and no more than an additional 2-3% beyond current levels - Q2 data has a strong seasonal tendency to rebound from weakness in Q1”.