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MS on the dollar:
- "We expect these trends to continue into the summer with modest but broad-based USD strength into 3Q22 propelling the DXY to 105. The combination of continued geopolitical uncertainties in Europe and Covid lockdowns in Asia should continue to fuel the 'growth divergence' narrative while North America, with continued policy normalization from the Fed and BoC, economic insularity, clean local balance sheets, and elevated savings, may be more immune to the perceived global slowdown," MS notes.
- "USD (and CAD) strength should be fairly broad-based, led by weakness in AUD and NZD, those currencies most sensitive to global growth expectations, while European currencies should remain under pressure as well amid the USD rally. This USD strength is fairly out of consensus for the coming weeks and months," MS adds.
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Weekly candles:
