The Dollar weakened on the back of the moderate dovish surprise by the Fed yesterday. Economists at ING expect the US Dollar to come under more pressure.

Market’s pricing and the Dollar will remain a function of banking stress

“With a market not trusting the more ambiguous Fed communication and the US regional banking crisis far from resolved, it looks like investor bias on the Fed may stay on the dovish side. This should translate into a continued bearish bias for the Dollar, primarily against European currencies should the stabilisation in European sentiment continue.”

“Still, we see a high chance of seeing small USD upside corrections on the way, rather than a straight-line USD depreciation.”