The dollar rose against nearly all the currencies last week. Among the majors, the chief exception was the Japanese yen, which seemed to benefit from the equity weakness and the drop in yields, perhaps not really so much of the widely touted safe haven attribute, but the unwinding of funding positions. The main exception among emerging market currencies was the Indian rupee, which moved into the upper end of its three-month trading range as tensions with Pakistan appeared to ease, and foreign interest in Indian equities continued.
The disappointing US jobs growth saw the greenback’s gains pared ahead of the weekend. Does the loss of momentum signal a correction is at hand? Will the anticipation of a dovish hold by the Federal Reserve on March 20 dissuade short-term participants from aggressively chasing the dollar higher from here? Here is how we see the near-term technical condition.
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