12 May 2015
DXY could drop to 90.00/92.00 – Westpac
FXStreet (Edinburgh) - The US Dollar Index (DXY) could extend its downside to the area of 90.00/92.00, according to strategists at Westpac.
Key Quotes
“West coast ports and BEA imports data confirm the ports disruption is now in the process of being cleared”.
“15 year lows in jobless claims and still healthy reads for both the Markit and ISM services PMI are encouraging too”.
“However the growing body of evidence suggests the dislocation in energy output and investment along with the higher USD are exerting a bigger drag”.
“Consensus has thus far trimmed 2015 GDP from 3.2% in Jan to 2.8%, yet our analysis suggests these two more enduring headwinds could lop at least 1ppts from 2015 GDP growth”.
“Bottom line the trend toward US growth downgrades and deferred Fed tightening expectations appears to still have a way to go”.
“We have run with a negative one month USD bias and a bullish three month bias for some weeks, in the case of the latter looking for oil prices, yield spreads and growth differentials to swing back in a USD positive direction. We are growing impatient with the three month bullish USD index outlook”.
“Response to numerically significant resistance at 100.00 has been an impulsive rejection, implying a likely multi-week / month decline, initially towards 90.00/92.00”.
Key Quotes
“West coast ports and BEA imports data confirm the ports disruption is now in the process of being cleared”.
“15 year lows in jobless claims and still healthy reads for both the Markit and ISM services PMI are encouraging too”.
“However the growing body of evidence suggests the dislocation in energy output and investment along with the higher USD are exerting a bigger drag”.
“Consensus has thus far trimmed 2015 GDP from 3.2% in Jan to 2.8%, yet our analysis suggests these two more enduring headwinds could lop at least 1ppts from 2015 GDP growth”.
“Bottom line the trend toward US growth downgrades and deferred Fed tightening expectations appears to still have a way to go”.
“We have run with a negative one month USD bias and a bullish three month bias for some weeks, in the case of the latter looking for oil prices, yield spreads and growth differentials to swing back in a USD positive direction. We are growing impatient with the three month bullish USD index outlook”.
“Response to numerically significant resistance at 100.00 has been an impulsive rejection, implying a likely multi-week / month decline, initially towards 90.00/92.00”.