DXY: Break above 106.80 to open up a return towards 108 – SocGen
|The US Dollar Index closed September and Q3 off highs after profit-taking on Friday. Economists at Société Générale analyze DXY outlook.
Dollar dips look set to continue to attract buying interest
A return above 106.80 potentially sets up the DXY for a return towards 108 and the highs of late November last year.
Underwhelming US ISM and NFP data, and/or FX intervention by the BoJ (selling USD) would thwart the upward trend.
Dollar dips look set to continue to attract buying interest as investors respond to the bear steepening of the 2s/10s Treasury curve. The spread moved through -50 bps in September. The March low of around -40 bps is key resistance.
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