NEW YORK (Scrap Register): Much of the bad news surrounding the U.S. government shutdown has been priced into the U.S. dollar, thus the greenback could be due for a short-term correction higher, according to foreign-exchange analyst at TD Securities.
However, the bank is maintaining is an overall bearish view of the U.S. dollar, despite the risk of a short-term rally.
As the circus plays out, we exercise caution on chasing the dollar lower over the next week few weeks, however. Instead, we look to use any positioning-inspired rallies in the buck to get fresh short exposure at better levels, TD Securities added.
Many commodity analysts have noted that U.S. dollar weakness has been the most significant support for gold prices, which are only slightly down from their recent four-month highs.
They have warned that renewed strength in the U.S. dollar could create some profit-taking in gold.