USD: watch for broader gains in coming months - Scotiabank

Analysts at Scotiabank explained that the USD is ending the month of May on a strong note overall, chalking up impressive gains against its G-10 counterparts.

Key Quotes:

"With the Fed in play and markets still reluctant to fully endorse the idea that the Fed can push more than one rate increase through this year, we think the diverging monetary policy/asymmetric growth theme can re-emerge as a driver of additional USD gains in the coming months, supported by firmer short-term rates (US 2y bond yields are near the March highs around 0.92%). 

May’s gains look technically strong for the USD and signify perhaps the resumption of the broader USD gains."