Global risk sentiment continues to be challenged. Economists at ING expect the US Dollar Index (DXY) to stabilize and see limited scope for a correction.

BALANCE OF RISKS TILTED TO UPSIDE

“With fears of global recession adding pessimism to the overall picture, we struggle to see a material recovery in sentiment for now.” 

“Equity instability may continue to put a limit to any dollar correction for now, and further upside risks to the greenback may come from a further repricing higher in Fed’s rate expectations.” 

“A stabilisation in the dollar around current levels is possible today, but we continue to highlight: a) limited scope for a correction; b) a balance of risks still tilted to the upside in the near term.”