The US Dollar (USD) bounced overnight after core CPI, real hourly earnings report surprised to the upside, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

USD shorts may just get another squeeze again

“The upside surprise in US data serves as a reminder how crowded USD shorts can further be squeezed out – these also underscores how US data can prove to be asymmetric to USD price action. Today, we have PPI and initial jobless claims. Another better-than-expected print in favour of US may well see dovish expectation being scaled back.”