Market Outlook: The Risk Balance for the Dollar Seems to Tilt Downward in the Short Term

Maybank analysts suggested that the risk balance for the dollar appears to have shifted downward in the near term. The DXY index rose to its highest level for 2024 following signals that the Fed may opt for slower interest rate cuts next year, prompting Maybank to be “more cautious about chasing the USD higher from this level.” The bank noted, “The market's tendency to surpass after the recent FOMCs indicates that positioning could be moderate with any signs that the economy may soften from here.” Maybank also indicated that Trump's policies seem to support the dollar, but there is a window for the DXY to correct between now and the opening on January 20.