USD to extend its correction amid divergence between Fed and market expectations – Commerzbank

US Dollar struggles. In the view of economists at Commerzbank, USD weakness might not have run its course yet.

USD correction set to continue

“The more notable the economic slowdown becomes, the more the market is therefore likely to feel confirmed in its view that the Fed will eventually waver. In particular as disagreement about the size of the next rate step is already emerging amongst Fed members.”

“I expect that the USD correction will only come to an end if the divergence between Fed and market expectations as regards the development of interest rates in the second half of the year has been resolved.”