There may be constraints on the USD rebound extending further ahead Jackson Hole – Scotiabank

The USD is trading mixed versus the majors. Economists at Scotiabank analyze Greenback’s outlook.

Narrower spreads should help check the USD advance

The undertone remains constructive on the face of it but there may be constraints on the USD rebound extending further ahead of the Jackson Hole event at the end of the week. 

DXY’s recent gains have largely reflected more USD-supportive spreads versus its peers but the index is trading right on its estimated value, based solely on 2Y spreads, and so looks quite fully priced. Narrower spreads should help check the USD advance.