More upside risks for the Dollar look on the cards – ING

FX is looking at the debt-ceiling concerns. Negotiations restart on Tuesday, but the US Dollar is set to enjoy further gains in the near term, economists at ING report.

Debt ceiling jitters raise upside potential in near term

“What is really keeping the Dollar afloat at this stage is the debt-ceiling impasse in Washington, in our view. Negotiations between President Biden and congressional leaders should resume on Tuesday, but unless we see truly encouraging progress, investors’ fears may keep growing.”

“Barring positive news on this end, we think the balance of risks remains tilted to the upside for the Dollar for now, which should see safe-haven flows as risk sentiment stays subdued.”

“The rebound in DXY could extend to the 103.50/104.00 area in the coming days.”