Forex
Dollar Rallies Lose Steam as Fed Rate Hike Expectations Peak
The US Dollar's recent rallies may be fading as market expectations for Federal Reserve rate hikes have peaked, according to TD Securities' Macro Research.
The research team notes that softer US payrolls data has a limited impact on the Dollar, with the labor market still described as 'buoyant' and not overheating or deteriorating.
TD sees near-term rate hike expectations easing in both the US and Europe, which could limit the upside for the USD.
The team's FX expert notes that it is hard to see persistent bullish signals from the US data/Fed channel alone, but macro fundamentals do not yet justify a move into a new higher orbit for the USD or a return to peak safe-haven era.