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Jun 28 - 10:55 AM

USD: To Further Reverse Initial Post FOMC Gains Absent A Big Upside Surprise From June's NFP - MUFG

By eFXdata  —  Jun 28 - 09:32 AM

MUFG Research expects the USD to lose some ground in the near-term in a reverse to post-FOMC gains.

"The release of the latest IMM report at the end of last week revealed that the Fed’s hawkish policy surprise did trigger a large reduction in short US dollar positions as we had suspected. The US dollar short squeeze contributed to the sharp 2% initial rally for the dollar index. What was more surprising was the breakdown of the position adjustment. The reduction in US dollar shorts was entirely driven by the Asset Manager/ Institutional category while Leveraged Funds continued to build short US dollar positions at least until the week ending 22nd June," MUFG notes. 

"The main event risk for US dollar performance in the week ahead will be the latest NFP report on Friday. Absent a significant upward surprise, we expect the US dollar to further reverse initial post FOMC gains in the week ahead," MUFG adds. 

Source:
MUFG Research/Market Commentary

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