Forex
DXY Seen Retreating from Recent Highs as Dollar Index Range Widens
The US Dollar Index (DXY) is expected to return to its pre-May range of 96.00-100.00, according to Brown Brothers Harriman's Elias Haddad.
Haddad notes that the dollar stabilized after a sharp sell-off linked to suspected USD/JPY intervention, but argues that the broader USD rally since May has likely ended.
The stabilization is attributed to softer US inflation data and solid domestic demand. However, concerns about Fed Chair Kevin Warsh's failure to turn tough inflation rhetoric into credible policy are increasing the risk of the Fed falling behind the curve in containing inflation.