ANZ Research discusses the USD outlook and warns about chasing the USD lower from current levels.

"We are cautious about chasing the USD lower on a tactical basis and think 98 on the DXY is a floor for now as oil prices are unlikely to return to pre-March levels in the coming months. So an oil premium will likely remain attached to the USD, unless lower-than-expected tariff revenue and increased defence spending worsen the US fiscal outlook and offset some of this. But that would be a few months away," ANZ notes.

US economic data surprises continue to be resilient compared to other global economies. This is important because if the Middle East conflict drags on, higher energy prices would favour the US compared to energy importing economies and may see a return of ‘US exceptionalism’. But it is too early to draw this conclusion. Labour market indicators in March , specifically, robust payroll growth and a lower unemployment rate, do not strongly support the case for markets to price-in rate cuts," ANZ adds.