In a report, ING economists pointed out that the dollar will continue to be “trapped” in the event that foreign exchange volatility fails to pick up, which leaves room for carry trades to continue to support high-yielding currencies and suppress funding currencies.
The greenback may need some convincing evidence to refute claims of a soft landing for the economy before it breaks lower in the coming days.
Today will be an opportunity to test that claim.
U.S. manufacturing has been in contraction since November, although consensus expectations for a modest rebound this month may not have a major impact on the market.
ING believes that JOLTs job vacancy data is more likely to sway investor sentiment today, and the market consensus is ready for the recruitment market to cool down.
