Financial markets started the new week on a cautious note. Economists at ING expect the US Dollar to move downward by the end of the week.

Yen to stay in demand for now

“Lingering stress in the financial sector and defensive positioning ahead of the FOMC event risk should offer support to the Dollar. We could, ultimately, see a 25 bps move as a sign of confidence in the market’s solidity and along with some gradual easing in global banking turmoil, Dollar losses might start to emerge towards the back of the week. 

“In the rest of the G10, we continue to see the Yen stay in demand for now.”

“Still, we have learned how news can change market conditions very rapidly in the current environment, so caution around clear directional views remains warranted.”