The US Dollar can remain supported for a bit longer – ING

A correction in the Dollar following a long weekend in many parts of the world proved rather short-lived. Economists at ING add poor Chinese data to the bullish Dollar mix.

China's data keep the Dollar attractive

“The risk-off sentiment seems to be primarily driven by disappointing manufacturing PMIs out of China, as the official survey showed a drop to 48.8 (contractionary territory), the lowest since December 2022.”

“Chinese growth sentiment remains a key channel to a rotation from the dollar to European currencies, and the recent cooling off of the Chinese recovery narrative is contributing to delaying such rotation. When combined with the ongoing hawkish repricing of Fed hawkish expectations, we think the Dollar can hold on to gains for the time being.”