Week Ahead: Can the Dollar's Upward Correction Continue Further?

US Dollar Performance and Market Outlook

Last week, the US dollar strengthened against most major currencies, with the exception of the Australian and New Zealand dollars. In the absence of significant new positive drivers, this upward movement appears to be largely technical, following a sharp decline that may have been triggered by the US's assertive stance regarding Greenland. The potential appointment of Warsh as the next Federal Reserve Chair, replacing Powell, also seemed to prompt corrections across various markets.

Additionally, after a series of weaker labor market reports, investors are increasingly expecting the Federal Reserve to implement at least two interest rate cuts this year. Although the dollar generally lost ground as the weekend approached, market sentiment remains cautious.