FXStreet reports that according to economists at Westpac, DXY upside is likely to prove fleeting.

“The Fed’s guidance remains a major constraint that should leave the USD languishing, even if the data cycle turns for the better. Admittedly more Fed officials are warming to a tapering discussion, but Powell, Clarida and Brainard remain committed to patience and any decision is months away. Even then, sustained DXY upside may not develop until tapering is very well advanced.”

“The Fed’s patient approach is likely to become an even more obvious drag on the USD in coming months. DXY is still a sell on strength, looking for fresh 2021 lows on a 3-month horizon.”