USD Looks ‘Cheap’ – Danske Bank
In opinion of Jens Pedersen, Senior Analyst at Danske Bank, the greenback could be poised for further upside.
“Overall our short-term financial models indicate that the USD is somewhat cheap as the Greenback has not followed US rates higher as much as a statistical and historical relationship would suggest”.
“Looking at financial condition-indices, the December Fed hike has - despite higher US rates - now been more than ‘unhiked’ by the weaker USD and higher equities, which raises the question of when the next US hike is due”.
“With the latest improvement in US economic data and with yesterday’s multi-year high y/y PCE core inflation print in mind, Friday’s non-farm payroll release will be an important piece of that puzzle”.
(Market News Provided by FXstreet)