Brown Brothers Harriman's (BBH) Elias Haddad reiterates its constructive view on the Dollar Index (DXY), warning it may overshoot the upper end of its 96.00-100.00 range in the near term. Haddad argues resilient US economic activity, both in absolute and relative terms, should dominate any US Dollar (USD) drag from improved Iran-related risk sentiment. Upcoming US confidence and employment data are flagged as important.

DXY seen overshooting recent range highs

"We are sticking to our view the dollar index (DXY) risk overshooting the upper end of its nearly one year 96.00-100.00 range in the near term."

"Resilient US economic activity in both absolute and relative terms outweigh the drag to USD from a potential improvement in sentiment tied to the Iran war."

"Regardless, risk sentiment should remain supported because both sides are working out a deal that would extend the ceasefire by 60 days and reopen the Strait of Hormuz."

"May Conference Board Consumer Confidence index is today’s data highlight. Pay attention to the job demand subindexes for more evidence the labor market is stabilizing. ADP employment change for the week ending May 9 will also be worth monitoring."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)