FX markets start the week on a quiet footing. Is the Dollar rally getting tired? In the view of economists at ING, February's Dollar rally is a correction.

February's hawkish re-pricing of the Fed story might have come far enough

“Friday's price action suggested that February's hawkish re-pricing of the Fed story might have come far enough for the time being. US yields reversed from highs seen in early Europe on Friday and DXY dropped quickly from a high of 104.60. On Friday, we had said that this DXY rally could extend to 105.00 or, with outside risk, to 106.50. Yet Friday's price action suggests those levels could be out of reach.”

“Overall our base case is that February's Dollar rally is a correction – but this week will determine whether it runs out of steam or has a little further to go.”