A back up in short-term rates could frustrate Dollar bears in the near term – ING

The consensus view in 2024 is that the Dollar will decline. Economists at ING agree but with some caveats.

Back up in short-term rates is a Dollar positive

We sympathise with the increasing consensus view that the Dollar will trend lower in 2024. However, we think markets are wrong to price Fed rate cuts as soon as March, and a rebound in short-dated USD yields could give the Dollar breathing room in the near term. 

The kind of rangebound trading seen so far in January may be the norm for a bit longer in G10.