Usd Index To Experience More Losses

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Usd Index To Experience More Losses

USD Index To Experience More Losses On Account Of Soft Data

According to Scotiabank, the consolidation phase in the USD index (DXY) will likely continue on account of more soft data. At the same time, the stocks are likely to go higher, which will also prove to be a problem for the greenback.

To say that the USD is facing a really busy season ahead in terms of data would be an understatement. Scotiabank experts believe that the upcoming data from the USA will likely be soft, which will not be good for the DXY.

US Dollar To Go Down In Last Few Weeks Of 2023

For starters, the weekly jobless claims are slowly rising every month, which could lead to some major problems later down the road. Although the earlier data was not accurate as the auto strikes affected it, it will still show up in the upcoming data.

Elsewhere, the stock markets are having a field day as the S&P 500 has already gained 10% from the low of October 2023. In addition, the year-end rally is also likely to take place, which could add more points to the index.

In simple words, the stocks are expected to rise as we fast approach the yearly end. This may be good for the equities market but not so much for the currencies.

That's why it is safe to say that the DXY is likely to head lower in the last few weeks of 2023. Another thing to note here is that the volatility will likely be very low in the FX markets. This puts currencies such as the USD at a higher risk of being manipulated by big players in the market.

However, the bottom line is that movement will remain limited in the DXY as the holiday season has already started. But, the chances of downside are still relevant for the greenback as the stocks are expected to rise.

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