The depreciation of the US Dollar (USD) in response to the FOMC press conference by Fed Chair Powell has not lasted long. Economists at MUFG Bank analyze Greenback’s outlook.

DXY to remain in a 102-00-105.00 trading range

The price action for the Dollar continues to point to the prospect of the Dollar remaining in a relatively tight trading range. 

There is a strong expectation implied in forward market pricing of a synchronised easing of monetary policy this year, at least amongst the key central banks. The Fed, ECB, BoE, BoC, and SNB are all priced at about 20 bps of easing by June and have similar cumulative amounts of easing priced for 2024 as a whole (75-95 bps). It points to DXY for now remaining in a 102-00-105.00 trading range that has prevailed so far this year.