A relief return after a bad week – DBS

The dollar index (DXY) is consolidating near the top of its three-week range (100.5 and 101.9), notes DBS FX strategist Philip Wee.

DXY is near the top of a three-week range

“DXY may consolidate after a two-day pullback near the upper end of its three-week range (100.5 and 101.9).”

“The 2Y US Treasury yield rose 2.3bps to 3.67% after four straight sessions of declines. Overnight, the Dow, S&P 500 and Nasdaq Composite each gained 1.2%, stabilizing after their worst weekly selloff this year.”

“The futures market sees the Fed needing to act more strongly with a 50 basis point cut at next week’s FOMC meeting to counter US recession fears linked to a cooling labor market.”