ANZ Research sees a scope for the USD to regain some grounds in the near-term.
"Although CPI and wage growth eased in December, recent rhetoric from FOMC speakers has shown the Fed still holds a strong conviction about the need for tighter policy until core inflation reflects sustainable declines. Fed members Bostic, Daly and Bullard all reiterated their support for interest rates reaching above 5% before a pause in hiking is considered. We expect a25bp hike at the February FOMC meeting," ANZ notes.
"We expect some DXY consolidation as the large drop of 10.3%since September2022 may be an undershoot, and the index may be primed for a bounce in the short term," ANZ adds.