A significant USD rebound is unlikely – Scotiabank

The USD spent most of Monday consolidating. Shaun Osborne, Chief FX Strategist at Scotiabank, analyzes Greenback’s outlook.

Moderate USD rebounds remain a sell

There is a little second-guessing on the USD sell-off starting to emerge amid concerns that the drop is overdone. That is quite possible and something I have alluded to, with the USD decline overshooting the shift in spreads to some extent. That may limit the USD decline for the moment and may allow for some short-term gains. 

But in the absence of any real change in the inflation/Fed narrative, a significant USD rebound is unlikely and the currency will remain sensitive to weaker data in general. 

With technical trends still aligned bearishly as well, moderate USD rebounds remain a sell.