Greenback’s consolidation ‘might not last’

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“The failure of the dollar to rebound more significantly is a sign that the market is not fully convinced of going long,” said analysts at BNP Paribas. They said saying that talk of petro-dollar bids at the $1.2700 level in euro/dollar was contributing to the weak sentiment on the dollar.

Russia, where foreign exchange reserves have risen to record levels this year as it benefited from soaring energy prices, provided further evidence of the growing threat to the dollar’s global dominance as it it said it would increase its euro holdings.

Analysts at BNP Paribas said that while the current volatile environment meant that they could see a continuation of the pause in the dollar’s downward trend in the near-term, the greenback would come under renewed pressure once it was established that US interest rates had peaked after next month’s Federal Reserve policy setting meeting.
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