The dollar's risk profile remains biassed to the upside, according to ING.

Economists at ING report say that "the dollar's strength isn't going anywhere. The dollar has likely found a new floor, with risk assets continuing to display instability and markets having made a conviction call on the Fed's aggressive tightening cy

April 27, 2022 - 04:32 PM 277 views

The dollar's risk profile remains biassed to the upside, according to ING.

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© The dollar's risk profile remains biassed to the upside, according to ING.

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Economists at ING report say that "the dollar's strength isn't going anywhere. The dollar has likely found a new floor, with risk assets continuing to display instability and markets having made a conviction call on the Fed's aggressive tightening cycle.

    The dollar's purpose is to provide support to the volatile markets.

     It’s a risky challenge to find the tops in the dollar rally. Although the Fed’s tightening policies are heavily charged, there is no hope of watching the separations between the central bank's communications and market expectations unless we did it in the case of major central banks.

With the Federal Reserve broadly endorsing the market's bullish pricing, any possibility of a substantial dovish re-pricing for the dollar appears to be improbable."

Furthermore, the dollar's strength is more likely to go stronger against the high-beta currencies. However, DXY (where low yielders are more heavily weighted) might potentially break beyond two-year highs and stabilise above 103. "

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