USD: Further strength not so simple to sustain – ING
The US Dollar (USD) has continued to strengthen this week, as US credit market concerns appear to have now entirely left the FX market. The very large gold correction yesterday potentially added some support to the greenback, ING's FX analyst Francesco Pesole notes.

The US Dollar (USD) has continued to strengthen this week, as US credit market concerns appear to have now entirely left the FX market. The very large gold correction yesterday potentially added some support to the greenback, ING's FX analyst Francesco Pesole notes.

No meeting doesn’t equal higher tariffs

"We discussed in yesterday’s FX Daily how the dollar could have extended gains up to current levels on the back of US sentiment stabilisation, but a further USD rally from here will be harder to justify unless markets find reasons to price out one of the three Fed cuts expected by March. The most realistic driver of such hawkish repricing this week would be a hot CPI figure on Friday, which we don’t expect."

"One factor potentially reigniting USD fragility could come from US-China tensions, after Trump said yesterday that his meeting with China’s President Xi next week may not happen. For now, this is being seen as simple brinkmanship, but China has struck a sourer tone around these negotiations, and markets may be erring on the side of complacency."

"No meeting doesn’t equal higher tariffs, but it should be enough to weigh on risk sentiment and the dollar."


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