More downside risks for USD in the near term – ING

The US Dollar Index is somewhat offered in the low-102.00s. DXY could re-test yesterday’s 101.55 lows by the end of the week, economists at ING report.

Dollar on unstable ground

“One could argue that the dollar is facing a rather uniquely-timed combination of negative factors and that the sustainability of the optimistic growth re-rating in Europe and China may be challenged by fresh commodity price volatility and high infection numbers – respectively. We see value in such an argument, and a straight-lined Dollar depreciation in the first quarter is far from assured. But global and US-specific dynamics continue to suggest a bearish bias on the Dollar in the near term.”

“DXY may re-test yesterday’s 101.55 lows by the end of the week.”