Market Outlook: A Slip in US Growth Outlook Could Trigger a Decline in the Dollar

Forex - Danske Bank strategist Mohamad Al-Saraf stated that the dollar is at risk of a lower correction in the near term if the U.S. economic outlook weakens. According to Al-Saraf, the market may be underpricing the likelihood that the U.S. Federal Reserve will reduce interest rates, and a weakening growth outlook for the U.S. would likely trigger declines in the dollar. This suggests that if upcoming U.S. economic data fails to meet expectations, the Euro could have some upward potential against the dollar, but would likely remain range-bound. EUR/USD is near the lower end of the $1.0350-$1.0450 range ahead of the U.S. initial jobless claims data at 16:30 and ISM U.S. manufacturing data on Friday. The Euro is currently trading at $1.03675, up 0.1%.