The risk of more strength in the USD is high – Scotiabank

The Dollar is flat as the relentless rally takes a breather. Economists at Scotiabank analyze Greenback’s outlook.

Markets prone to a USD downswing in the event of adverse fundamental news or even a US government shutdown

The risk of more, at least short-term strength in the USD is high, given momentum, but there is a risk that positioning and sentiment are shifting too far, too quickly, leaving markets prone to a USD downswing in the event of adverse fundamental news – a weak data print or two – or even a US government shutdown. 

Short term price signals suggest a brief pause perhaps in the broader USD rise.