Premature to conclude that the USD is now set to weaken on a sustained basis – MUFG

Market news

24 October 2023

Premature to conclude that the USD is now set to weaken on a sustained basis – MUFG

The USD softened broadly on Monday. Economists at MUFG Bank analyze Greenback’s outlook.

EUR/USD could see the move to the upside extended further

Ultimately, it will only be a turn in the official data that will prompt a more lasting sustainable turn lower in US yields. Hence, it would be premature to conclude that the US Dollar is now set to weaken on a sustained basis.

Still, positioning does appear to have been quite short and Monday’s bounce in EUR/USD took us to a high not seen since 20th September (intra-day high 1.0737) and positioning given the surprise bounce on Monday could see the move to the upside extended further.

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