MUFG Research discusses the USD outlook and flags a scope for further weakness in the near-term.
"The US dollar has continued to trade at weaker levels during the Asian trading session after breaking lower at the end of last week. The dollar index finally broke below its 200-day moving average on Friday at 96.600 which opens the door to further weakness in the near-term.
Last week’s clear signal form the Fed that it is planning to cut rates as soon as at their next FOMC meeting in July is beginning to weigh more heavily on the US dollar especially given there is a material risk that the Fed could deliver a 0.50 basis point cut," MUFG notes.
"Even if there is positive outcome from talks between Presidents Trump and Xi at this week’s G20 Summit, which are unlikely to be sufficient on their own to prompt the Fed to shelve plans for rate cuts in the near-term," MUFG adds.