A soft US Dollar Index (DXY) backdrop is forming. Nonetheless, in the opinion of economists at Westpac, it is still too early to call a long-term DXY peak. They believe that DXY could range for a bit, but retracements into the 101 level are a buy.
Too early to call a long-term peak
“Too early to call a long-term DXY peak, though a softer USD macro backdrop is nevertheless taking root.”
“China is starting to reopen, the ECB is adopting a more hawkish policy path and tighter US financial conditions are starting to bite into US growth.”
“DXY could range between 101-105 for a while here, but a long-term peak is not yet in.”
