Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Sep 06 - 12:55 AM

ING: Rapid and Substantial USD Correction Expected Once The U.S. Data Turn

By eFXdata  —  Sep 05 - 04:30 PM

ING has pointed out that the U.S. dollar's strong performance in August was not fully supported by conventional market drivers such as relative rates, equities, and commodity dynamics. Their short-term fair value model shows the dollar as overvalued against all G10 currencies to varying degrees. ING believes that a deterioration in U.S. economic data remains the most plausible trigger for a rapid and substantial dollar correction.

Key Points:

  • Dollar Overvaluation: According to ING's short-term fair value model, the dollar is overvalued against all G10 currencies. The overvaluation is moderate against the GBP (<1%) but becomes more significant against Scandinavian currencies (>3%).

  • Trigger for Correction: ING asserts that a downturn in U.S. economic data is the most likely catalyst for a correction in the overvalued dollar.

  • Potential for Rapid Correction: Should U.S. data deteriorate, the dollar could see a rapid and sizable correction, given its current state of overvaluation.

Trading Recommendations:

  • Be Prepared for Volatility: Traders should brace themselves for a potential rapid correction in the dollar, particularly when new U.S. economic data is released.

  • Watch U.S. Economic Indicators: Close attention should be paid to upcoming U.S. economic releases, as negative data could be the trigger for a significant USD selloff.


For Traders:

  • Short USD Positions: Those holding short positions in the USD should be aware that a U.S. data turn could lead to a rapid correction, benefiting their trade strategy.

  • Risk Management: Given the likelihood of a rapid correction, risk management strategies should be in place to protect against abrupt moves.

For Policymakers:

  • Economic Deterioration Impact: Policymakers should note the sensitive market reaction to economic data and be prepared for currency fluctuations in response to policy announcements or data releases.


ING suggests that the U.S. dollar is currently overvalued and that its strong performance in August wasn't justified by typical market factors. They propose that the dollar is primed for a correction, which could be triggered by a downturn in U.S. economic data. Given the current overvaluation, this correction could be both rapid and substantial.

ING Research/Market Commentary


  • eFXplus
  • End-user license agreement (EULA)


  • About
  • Contact Us


  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2023 eFXdata · All Rights Reserved