The dollar’s gains at the start of this year have been modest due to the market’s conviction that the Federal Reserve will cut interest rates this year, ING said.
Increasing long dollar positions is now viewed as a “counter-trend trade.”
January and February are typically good months for the dollar, but the currency is more likely to trade in a range for now. ING said the DXY dollar index could trade within a range between 101.90 and 103.10 this week, awaiting Friday’s inflation data and bank earnings.