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Dollar Is Trading at a Discount for First Time Since March Chaos

  • DXY at 1.4% discount to fair value; was at 8% premium
  • Euro is feeding off of the weakness in the greenback

The dollar is looking unloved with the curtain having come down on one of the most intense episodes of currency-market stress. But don’t bank on a major slump.

The dollar is now trading at a discount to fair value for the first time since the tumult that gripped the G-10 complex back in March. The U.S. Dollar Index (DXY), which traded at a hefty premium of as much as 8% at one point, has an offered tone now. Indeed, at 94.986, the index is trading at a discount of 1.4% against the fitted curve in a multivariate setting.