FXStreet reports that Westpac said that the Fed’s resolutely dovish stance and growing Eurozone rebound optimism leave DXY soft in Q2.

“DXY’s near-term fate rests entirely with the April payrolls report. Few will be surprised by a 1.5-2 M payrolls increase, making for an incredibly high bar to resuscitate the US macro outperformance trade, especially with Europe getting her vax act together and reopenings gathering pace. A sub-1mn payrolls print could be devastating for near term USD prospects.” 

“Until there’s further ‘substantial progress’ in clawing back 8mn+ in pandemic job losses a near united dovish Fed front should prevail for some months yet, undercutting DXY upside potential.”