US dollar remains rangebound ahead of key central banks

The US dollar looks set to end another week broadly unchanged against most major currencies. Activity data released this week seemed consistent with resilience in European economies and near-recessionary conditions in the US, and we have revised our major forecasts to reflect a smaller rebound in the dollar than we previously anticipated. But we think that this headwind for the greenback has largely run its course. What’s more, we expect continued weakness in US economic data to dent risk sentiment, tighten financial conditions and push the dollar higher over the coming months.