Dollar’s correction looks mostly technical in nature – MUFG

The sustained period of US Dollar strength has finally met some resistance that has prompted a turnaround. Economists at MUFG Bank analyze Greenback’s outlook.

Yields remain elevated

For now, this correction of the Dollar weaker looks mostly technical in nature. We are also at month-end and fiscal half-year-end for some and that too may be drawing non-fundamental FX flows that could fade quickly.

Yields remain elevated despite the correction from Thursday’s intra-day high and while the government shutdown is a risk to yields coming lower it is unlikely to play out that way over the very short term.