Credit Suisse discusses the USD outlook and flags a scope for a 2-way risk in the near-term.
"Where do we stand now? We would argue that the current situation is a mixed bag, but that enough progress has been made in total to allow finally for twoway risk to be the state of play for USD as opposed to a one-way train higher. This reality can be seen in collapsing FX implied volatility from recent peaks, as well as more reasonable levels of 25-delta risk reversals," CS notes.
"So, after weeks of USD gains, in the very near term for the rest of this week, two-way risk probably means further corrective losses are likelier than renewed gains," CS adds.