The med-term bias for the dollar remains tilted to the downside which is driven by th FED's monetary policy but also by the current global synchronised recovery and reflation we are seeing playing out.
However, there are a couple of factors that could spell some upside for the dollar. The majority of the upside we saw from the start of 2021 was mostly some unwinding of the massive oversubscribed short bets that we started the year with.
Now that most of that has played out, we have seen some med-term downside for the dollar over the past few weeks.
The factor to watch is the current shaky risk tones we've seen in the market from last week. Even though nothing has changed the equity markets have benn trading rather rangebound and did not manage to see any meaningful upside despite solid earnings beats.
Thus, the dollar might be seeing a bit of safety inflows with that in mind.
However, there are a couple of factors that could spell some upside for the dollar. The majority of the upside we saw from the start of 2021 was mostly some unwinding of the massive oversubscribed short bets that we started the year with.
Now that most of that has played out, we have seen some med-term downside for the dollar over the past few weeks.
The factor to watch is the current shaky risk tones we've seen in the market from last week. Even though nothing has changed the equity markets have benn trading rather rangebound and did not manage to see any meaningful upside despite solid earnings beats.
Thus, the dollar might be seeing a bit of safety inflows with that in mind.