The DXY had firmed slightly above 104, but the US Dollar’s (USD) momentum could be tapering off already, DBS’ FX & Credit Strategist Chang Wei Liang notes.

USD momentum fades

“Re-repricing in US short-end rates looks done with less than two 25bps rate cuts priced over the next two FOMC meetings. Markets are also fully appreciating Trump’s presidential chances, given closely matched poll numbers in the key swing states.”

“On the long-end, US 10Y yields have already risen back to pre-Jackson Hole levels at 4.20%, which is remarkable given the start of Fed rate cuts in September, with more to come later.”