USD bear run is overdone – ING

The Dollar plummeted after a softer-than-expected US CPI reading. Economists at ING analyze USD outlook.

Dollar slump looks overdone

We still think a turn in activity data – more than the disinflation story – is needed to take the Dollar sustainably lower, and the move appears overdone also from a short-term valuation perspective.

Today, October Retail Sales will be watched closely after coming in very strong in September. Consensus is for a 0.3% MoM decline in the headline figure but a 0.2% increase in the index excluding auto and gas. The dollar should be very sensitive to the release. A soft reading may fuel speculation that softer growth is coming through and could add to disinflation to trigger more Fed dovish bets. However, US activity data has had a tendency to surprise on the upside, if anything, and it may be too early to see a slew of soft readings.

See – US Retail Sales Preview: Forecasts from seven major banks, retreat in consumption for first time since March