USD will react particularly sensitively to data that does not confirm soft landing view – Commerzbank

FXStreet Insights Team FXStreet

Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, analyzes US data and their effect on USD exchange rates.

Some traders clearly were not comfortable with EUR/USD levels below 1.05

Thursday’s correction of USD strength developed quite independently of the data publications. Some traders clearly were not comfortable with EUR/USD levels below 1.05 and the data did not change that significantly. Of course, this does not point towards a trend reversal, not even towards a complete end of the USD rally. Because the prospect of a soft landing of the US economy was only questioned very marginally.

Because the market has bet so clearly on a soft landing, I assume that the USD exchange rates will react particularly sensitively to data that does not confirm this view.

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