US Dollar
Highlights We agree with the market consensus that the long-term dollar outlook is bearish, but caution against chasing the dollar lower in the short term. While the election results remain uncertain, currency markets also continue to ignore risks of a…
Highlights Our base case of a Biden win with a GOP Senate may come to pass. But the US election is not over yet. Trump still has a chance of victory by winning Pennsylvania and one other state. If the vote count does not settle the outcome clearly this…
Your feedback is important to us. Please take our client survey today. Highlights The long-term outlook for the dollar is bearish, but fresh shorts could be offside over the next one to three months. An uptick in US political uncertainty adds to our…
Your feedback is important to us. Please take our client survey today. Highlights Mounting populism has created a structural tailwind behind inflation. The risk that inflation accelerates quickly is greater than the market appreciates. Monetary…
Highlights Most sentiment and technical indicators suggest the dollar is undergoing a countertrend bounce rather than entering a new bull market. However, the internal dynamics of financial markets remain short-term constructive for the DXY. The DXY could…
Highlights The dollar is on the verge of a significant breakdown. If the DXY punches through 94, it will likely mark the beginning of a structural bear market. The most recent catalyst – fiscal support in the euro zone – has been good news on the “anti-…
Highlights Should the DXY fail to breach below 92 in the coming months, momentum will be a risk to our short dollar positions. Another risk is valuation. The trade-weighted dollar is expensive, but not overly so. It is not especially expensive versus the…
Highlights The dollar is likely to churn on recent weakness before a cyclical bear market fully unfolds. The reason is that the economic landscape remains fraught with uncertainty, both politically and economically. We continue to recommend a barbell…
Highlights When it comes to a beauty contest among currencies, the US dollar is a winner right now. Significant dollar moves tend to occur in very long cycles. When – and only when – the crisis ends will the dollar begin to surrender to significant…
Highlights The Federal Reserve’s temporary FIMA repo facility will go a long way in helping ease dollar-funding stress outside the US. However, with the duration of the lockdown highly uncertain, a liquidity crisis could rapidly evolve into a solvency…