More weakness ahead for the USD in the short run at least – Scotiabank

USD is mixed versus majors. As economists at Scotiabank note, the supportive yield story is fading.

Spreads turn mildly less supportive

“The USD is trading mixed versus the majors but retains a soft undertone overall, suggesting more weakness ahead for the USD in the short run at least.”

“The Dollar’s essential problem is that the supportive yield story that powered gains for much of the past month is a bit less compelling now as markets price other central banks (essentially, the BoE and ECB) a little more aggressively.”

“Month-end flows may provide the USD with some support over the session.”