The US Dollar remains on the back foot following trade talks and also Trump’s criticism against the Fed’s rate hikes. What’s next?
Here is their view, courtesy of eFXdata:
Danske Research discusses the USD outlook from the positioning front and argues that the recent stretched USD longs can stay in such elevated levels for longer and won’t necessarily result in a near-term downside USD correction
“We still see USD support due to carry having reached critical levels and US rates being on the rise still.
This means that while speculators seemingly continue to add USD longs and positioning looks increasingly stretched – this could be sustained for some time and thus does not necessarily hint at a near-term correction as it might under ‘normal’ circumstances,’ Danske argues.
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