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USD: Correcting lower against other major currencies - MUFG

FXStreet (Delhi) – Lee Hardman, Currency Analyst at MUFG, notes that the US dollar has extended its correction lower against the other major currencies in the Asian trading session as long speculative positions continue to be pared back ahead of next week’s FOMC meeting at which the Fed is expected to deliver a “dovish” rate hike.

Key Quotes

“The US dollar’s correction lower was initially triggered by the less dovish than expected ECB easing announcement from last week. Expectations for further easing from overseas central banks have been dampened again overnight following both the signal from the RBNZ that there is now a higher hurdle for further easing, and the release of the robust Australian employment report.”

“As a result the Australian and New Zealand dollars have outperformed extending their recent resilience in the face of further weakness in commodity prices. In contrast, the US dollar is holding up better against emerging market and other commodity related currencies especially those of net oil exporting countries. New cyclical lows for the price of crude oil and building expectations for further renminbi weakness are resulting in US dollar strength rotating away from against other major currencies.”

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