MUFG Research flags a scope for further USD rebound in the near-term.
"In the near-term, there is still a risk that the US rebound can extend further following to heavy sell off at the end of last year. Short US dollar positions remain elevated which leaves room for further position liquidation," MUFG notes.
"At the same time, the relentless move higher in global equity markets has lost some upward momentum at the start of this year which is creating a more supportive backdrop for the US dollar in the near-term. The slow initial roll out of vaccines in Europe is also creating some concern that it risks undermining the outlook for global recovery in 2021 and boosting the relative appeal of the US dollar," MUFG adds.