BNP Paribas Expects Pace Of Any USD Decline To Slow In Immediate term

BNP Paribas note that “last Tuesday saw DXY’s largest one-day decline of the year to date.”

• “It was admittedly a perfect storm as CPI missed, US rates rallied sharply and the market was caught long USD.”
• “At this point, however, we calculate that USD positioning is now back to neutral after having been long for the past few months.”
• “Thus, while the USD can certainly decline further, it will require the market to build fresh shorts.”
• “With a lack of notable market catalysts this week and with the US out for much of the period given the Thanksgiving holiday, it suggests that the pace of USD weakness going forward will most likely be slower.”