USD gains may become a bit harder to come by beyond the next few weeks – Scotiabank

US Dollar edges slightly lower. Nonetheless, economists at Socitbank expect the greenback to remain well-supported on modest dips but it is set to struggle to extend its race higher in the next few weeks.

Month-end flows could extend the USD some support in the short run

“The USD should remain well-supported on modest dips in the short run but with the move to 5.50% in Fed Funds now full priced in at the short-end of the curve, USD gains may become a bit harder to come by (or be sustained) beyond the next few weeks.”

“Month-end flows which could extend the USD some support in the short run, given that US stocks have under-performed European markets by quite a margin over the past month.”