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The deflationary rhetoric weighed heavily on the dollar. Economists at ING analyze the outlook for the dollar.
Looking ahead to the next few weeks – leading up to the July FOMC meeting – it can be seen that there is not much other data that could significantly reverse the direction of the dollar.
Long dollar positions are rapidly evaporating, with the PPI data all but confirming the deflationary thesis in the US.
It’s hard to find a clear argument against the dollar’s bearish momentum, but the movement looks stretched, so watch out for a potential interim correction.
