Home USD: Key FX Themes For 2017 Are All Working Against

USD: Key FX Themes For 2017 Are All Working Against

The US dollar is on the back foot. While the most recent point of pressure comes from Trump’s revelation of sensitive information to the Russians (Sending EUR/USD above 1.10), there are other reasons to be doubtful. What’s next?

Here is their view, courtesy of eFXnews:

BTMU FX Strategy Research notes that  the USD  has been weakening as of late on a number of key factors.

In terms of our key FX Themes for 2017, we believe the key themes are now all working together against the US dollar,” BTMU notes.

In particular,  BTMU outlines the following 3 USD bearish factors:  1-  The European political risk premium has shrunk after the election result in France.  2-  Trump reflation optimism has been easing.  3-  Central banks outside of the US have slowly started to shift their guidance suggesting other central banks will soon follow the Fed’s lead in removing monetary accommodation.

What’s next? Further  USD Depreciation ahead:  

BTMU maintains its more bearish than market consensus view for the USD with expecting a near 4.0% drop in the DXY index through to end Q1 2018.

We doubt Fed rate hikes will provide much support for the dollar given the shifting stance from other central banks will prove more significant in limiting the scope for any shift in yield spreads in favour of the dollar,” BTMU argues.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.