The Dollar was unable to appreciate at all despite the fact that US data surprised on the upside. Economists at Commerzbank analyze Greenback’s outlook.
Market wondering how much USD strength the improved US economic outlook justifies
The Dollar was able to appreciate against the average of the G10 currencies in a straight line since the summer due to the improved US economic outlook. The market is currently wondering how much USD strength that justifies. Until that has been decided, positive US economic data will only have a weak effect at best.
Of course, that does not mean that we will only see limited fluctuation intensity of USD exchange rates, only that it will be a quest for a market equilibrium rather than a development driven by data.
Source: https://www.fxstreet.com/news/usd-positive-us-economic-data-will-only-have-a-weak-effect-at-best-commerzbank-202310270742