Richard Franulovich, head of FX strategy at Westpac, suggests that further near term follow through DXY weakness (97.0-97.5) would not surprise.

“The DXY and USTs have so far shed only a fraction of 2019’s safe haven gains. But we are not getting carried away and stick with a positive 1-3m DXY outlook. Negative tail risk scenarios have eased but the underlying state of the global economy is still poor and the trade war détente is unlikely to yield breakthroughs on contentious structural topics like IP theft and state subsidies. Soft Sep retail sales warns business sector weakness may be bleeding into the hitherto resilient consumer, bolstering the case for an Oct Fed cut. The USD impact will be minimal though, with 84% priced in.”