USD Index: Soft data likely to drive more losses – Scotiabank

The USD’s consolidation is extending a little further. Economists at Scotiabank analyze Greenback’s outlook.

Stronger stocks mean stronger headwinds for the USD

There is a busy session ahead for the USD. Key data reports may be soft – weekly claims have been nudging higher and may be affected by seasonal factors while industrial production could be weighed down by the auto strikes. The USD may come under light pressure at least as a result of weak data. 

The S&P is up more than 10% from the late October low and seasonal trends suggest that jingling you can hear might be the ‘Santa Clause rally’ that typically gains traction about now after a mid-year stutter in risk appetite steadies. Stronger stocks mean stronger headwinds for the USD.