USD risks further pullbacks – Westpac

Strategists at Westpac expect the greenback to extend its decline in the near term.

Key Quotes

“USD still looks challenged here. With Q1 growth now a write off - the Atlanta Fed's latest nowcast at 0.1% - the Fed will want to see at least 2-3 months of stronger data to be sure residual seasonality depressed Q1 growth”.

“That calls into question a June 15 Fed hike, which was always looking dubious given proximity of the June 23 UK EU referendum”.

“Stability in China, as policy there forms traction another challenge to the USD, via China's impact on commodity prices and EM capital flow trends”. 

“DXY has been slipping and trend signals suggest it continues to head lower”.