USD Index: Gains could extend to test 102.50, potentially 104, before renewed weakness develops – Scotiabank

USD squeeze may extend in the short run, economists at Scotiabank report.

The peak in the Fed cycle is close

There is some potential for the USD to firm up a little more in the short run, particularly. Beyond the issue of short-term interest rate differentials, the broader USD outlook is likely to be handicapped by a few other factors, however. The peak in the Fed cycle is close. Seasonal trends are USD negative through end Q3. Technical pointers are USD-bearish in broad terms. 

DXY gains could extend to test 102.50, potentially 104, in the next couple of weeks before renewed weakness develops.